Judge delays Musk/Twitter trial, gives them three weeks to complete merger [Updated]
Update at 7:30 pm ET: Delaware Court of Chancery Judge Kathaleen McCormick granted Elon Musk's request for a stay in an order that gives the parties three weeks to negotiate and close the merger. The trial won't begin on October 17 as scheduled and would be canceled entirely if the merger closes by the end of this month. If deal talks fall apart, a trial would be scheduled for November.
[...] Musk's motion for a stay said the merger is on track to close by October 28. Twitter did not want the litigation stayed. "Plaintiff Twitter opposes the motion on the basis that Defendants' agreement will not ensure that the transaction closes fast enough," McCormick wrote.
Original story: Elon Musk today slammed Twitter for not immediately dropping its lawsuit against him and asked the judge to stay the case because "Twitter will not take yes for an answer."
[...] Musk agreed to buy Twitter in April but later tried to get out of the deal by claiming the company lied about the number of bots and spam accounts on the platform. Twitter sued Musk to force him to complete the purchase.
While Musk now accuses Twitter of "casting an unnecessary cloud of uncertainty over the company," Twitter's lawsuit against him said the company faces problems caused by Musk's public criticism and his attempts to break the merger agreement.
"Defendants' actions in derogation of the deal's consummation, and Musk's repeated disparagement of Twitter and its personnel, create uncertainty and delay that harm Twitter and its stockholders and deprive them of their bargained-for rights. They also expose Twitter to adverse effects on its business operations, employees, and stock price," Twitter's lawsuit said.
During the discovery process, Musk apparently wasn't able to obtain any substantial evidence to back up his spam claims, making it unlikely that he could win at trial.
Here's Everything We've Learned About Elon's Plans for Twitter
Here's everything we've learned about Elon's plans for Twitter:
Elon Musk has big plans for Twitter, and they include people paying money to tweet, bots getting the boot, and a social media network that doesn't care what you say as long as it's legal.
"I just want Twitter to be maximum amazing."
[...] But with a thousand caveats assumed, here's what we think we know about how Twitter, the product and platform, might change with Musk as its owner:
[...] "There's no WeChat equivalent outside of China," Musk said during a Q&A with Twitter employees in June. "You basically live on WeChat in China. If we can recreate that with Twitter, we'll be a great success."
[...] Musk, too, has been thinking about how to bring some of Signal's features — or even its actual platform — into Twitter. [...]
One big reason Musk seems to be chasing the WeChat model? Payments. WeChat makes money in part by taking a cut of all the payments — for rent, food, concert tickets, clothes, everything — made in the app. [...]
[...] Few people would probably think of Twitter as a great platform for video, but Musk is clearly interested in changing that. He has talked with several friends and colleagues about how to make video advertising work on Twitter and how to bring video creators over from platforms like YouTube and TikTok.
[...] Pushing Twitter to become more creator-friendly also matches with Musk's other ambitions for the platform. Creators are the most reliable source of big audiences, and Twitter's payment tools would take a cut of subscriptions and tips.
On the subject of the Twitter algorithm, Musk's take is hard to pin down. [...] Musk's plan seems to be to give people choice. [...]
[...] Musk has talked a lot about Twitter Blue over the last several months and seems to see paid memberships as a core part of Twitter's future. He pitched investors a plan that involved getting 69 million Blue subscribers by 2025 and 159 million by 2028. He wants to cut advertising to less than 50 percent of Twitter's revenue, and the only way to do that is to convince users to pay up in a big way.
[...] Practically as soon as Musk first announced he'd bought a large chunk of Twitter stock, he began to position himself as the free-speech savior of the platform. [...] Musk has indicated that he would reinstate Donald Trump to the platform and wants to drastically reduce Twitter's content moderation to allow everything that doesn't violate local laws. (This, like so many things Musk says he wants to do, is dramatically more complicated and difficult than he makes it sound. There are a lot of laws! And they're pretty different from place to place!)
Will this be the death of Twitter?
Original Submission #1 Original Submission #2 Original Submission #3
(Score: 2, Interesting) by Sjolfr on Tuesday October 11 2022, @10:16PM (11 children)
The sad thing is that everyone knows that twitter is a spam-bot cesspool. So are all of the other social media companies with their "likes" and "mentions" and "follows" and so on. Odds are that Musk couldn't rally any proof because Twitter refused to cooperate.
Still, I hope Musk turns twitter in to something better than the shit-hole it's been for a long time now. Maybe he ran run the analytics he wants when he owns the place and show, in court, that Twitter is/was lying.
(Score: 5, Informative) by helel on Tuesday October 11 2022, @11:31PM (1 child)
Obviously Musk didn't know or he'd have done due diligence instead of opting to purchase "as is."
(Score: 3, Interesting) by Sjolfr on Wednesday October 12 2022, @01:38AM
Maybe he did know and maybe he didn't think about it and maybe he didn't know. Knowing that there were tons of bots may be where the "as is" came from. It's a guess as to his state of information.
My assumption came from the fact that neither I, nor anyone I have ever talked to, would be surprised by the high percentages of bots on any social media. In fact, the shock would be at a low number of bots.
(Score: 5, Informative) by Anonymous Coward on Wednesday October 12 2022, @01:06AM
He's trying to extract $50B of publicity from it.
(Score: 4, Interesting) by Reziac on Wednesday October 12 2022, @02:55AM
"Maybe he ran run the analytics he wants when he owns the place and show, in court, that Twitter is/was lying."
I'm wondering if this might expose the previous ownership to lawsuits from users, once the data is available. (Not sure what they'd sue for, but people sue for anything and everything, so...)
And there is no Alkibiades to come back and save us from ourselves.
(Score: 3, Interesting) by RamiK on Wednesday October 12 2022, @11:05AM (6 children)
Twitter keeps a separate figure for "monetizable user accounts" over "user accounts": The former stands at 200 million and the latter is 1.3 billion. That is, following the 5% estimate, Twitter's official position is that they have 190 million users (that can be charged for ads revenues) and 1.11 billion bots, dead accounts, click farms, sock puppets, feed aggregators etc...
( https://investor.twitterinc.com/financial-information/quarterly-results/default.aspx [twitterinc.com] )
So, if you have actual evidence there's even less users than the official 10%, feel free to contact Musk and I'm sure he'll happily reward you with a few millions of dollars.
compiling...
(Score: 2) by Sjolfr on Wednesday October 12 2022, @08:32PM (5 children)
As Twitter has already refused any cooperation with Musk and his lawyers I'm fairly sure they will ignore me or anyone else.
We'll just have to wait until the merger is complete. Hopefully Musk can make all that data public.
(Score: 2) by RamiK on Thursday October 13 2022, @12:02PM (4 children)
Why should they cooperate with a hostile takeover? The law requires them to make certain disclosures in their reports which they did as the evidence discovery showed. Any investigations into properties and operations beyond that can and should have been negotiated during a normal merger process as is normally the case. However, Musk forgo that option when he made a straight bid.
It's like buying a house: If you don't look over the property and negotiate bringing in your own guys to look at the plumbing or whatever, you only get to sue if they stated something false. Not if it turned out something was wrong that they didn't know or promise about.
That's the reason normal mergers take years...
Now that he owns the place, the only data he'll publicize is the data making Twitter look good.
compiling...
(Score: 2) by Sjolfr on Thursday October 13 2022, @06:55PM (3 children)
Twitter refusing to cooperate is like trying to buy a used car when the current owner won't let you check the car for suspected problems. Clearly Musk went too far in to the buying process well before he should have. If twitter tanks he deserves that loss.
"you only get to sue if they stated something false" that's my point. If the twitter folks are/were lying about the bot percentages then Musk has a case for lawsuit, as long as he can prove that twitter was intentionally misleading him and stockholders. Even in the long run, as he continues to own twitter, he can flush bots and make a case for that being an improvement. Improvements and transparency like that go a long way to getting paying members instead of freeloaders and bots.
I guess we'll see.
It'll also be interesting to see what kind of pressure the Democrat party puts on the Musk-owned-twitter to tow a particular narrative in the next elections.
(Score: 2) by RamiK on Thursday October 13 2022, @09:32PM (2 children)
Note Musk was on the board for around half-a-year and had full access to all the internal oversight reports while being involved in various decisions and votes that the other board members and share holders were privy to. In fact, I doubt anyone denied him from doing onsite inspections or the odd interview with dept. heads and such. So, rushing here refers to the specific timing of the bid rather than the deal as a whole.
Not exactly. If management gave false reports to the shareholders, he could take them to court and get whatever pittance he can scavenge off them personally. However, the deal itself is done and whatever de-valuation happens as a result of him publicizing things won't be compensated for. After-all, when you own stocks in a company that ends up taking a dive, you don't get your money back even if that dive was the result of some fraud or something.
Why would anything change?
compiling...
(Score: 2) by Sjolfr on Thursday October 13 2022, @10:41PM (1 child)
Rushing yes, but I doubt the deal falls in to the 'hostile takeover' category. It's more of a lesson in making hasty decisions, spouting off about it, and living with the consequences.
The pressure on twitter to tow the line of "misinformation" might change because Musk has stated that he's about freedom of speech. It may not be a change the existence of pressure, rather the nature, and public narrative, of that pressure may change. It may not ... again, we'll see. In any case I will find it interesting.
You might but probably not. Most fraudsters move/spend/hide the stolen money so that it can't be recovered. In Bernie Madoff's case his estate paid back over $14 billion of the $17.5billion he stole before he died last year. Not sure who-all got paid back but Kevin Bacon seems to have not been among them. There are also federal and state processes that you can go through and, if there is money there, victims may get some back. Don't hold yer breath though.
I seem to recall a truck-load of bailouts in recent history too.
(Score: 2) by RamiK on Friday October 14 2022, @10:30AM
He originally negotiated with the board and they turned him down. He then started buying stocks via a shell corporation while delaying his SEC stake disclosure. Once he forced himself into the board, he started putting up twits like "Is Twitter dying?" to de-valuate the stock while still buying more and negotiating with the board to sell out... The pattern repeated a few times until he made a direct hostile bid to the board and they agreed but then he failed to transfer the money and they went to court while continuing to spread FUD and buy stocks...
It's the textbook definition of a hostile takeover.
( https://www.ft.com/content/b0b49bc2-9d6e-4e0d-8962-a0f60185947c [ft.com] )
You're not following the money: Say a CEO on a $30 million salary defrauds a board through false reports for 3 years. Now say someone buys the stocks of the company for $50 billion and finds out about it. He takes the CEO to court and wins. And it's a great victory with the court awarding the buyer with a huge $100 billion just for hell of it. Well, who is going to pay? At most, the CEO might be able to squeeze out $90 million if you're lucky. But the people who sold you those shares aren't a party to the crime anymore than a bank is responsible to crimes their clients do with money they lend.
That's where Musk might be here: Even if he ends up finding out Twitter's management played loose with the figures, he'll be lucky to get back a dime on the dollar. And that's assuming you can stick a fraud charge on upper management. In all likelihood, it's either that nothing was going on, that they simply didn't put too much effort into counting users (reminder: there's no legal standard required for how to count users) or that lower management / workers were the ones cutting corners. So, not only it will take a huge effort to stick charges in general, it will take an even greater effort to stick the charges to someone who can pay you back even a fraction of the losses you incurred. In short, Musk buying Twitter stocks is equivalent to him marrying into the business.
compiling...
(Score: 4, Funny) by Thexalon on Tuesday October 11 2022, @10:31PM
There you go, assuming that Twitter was ever alive. Your best argument is that it's a zombie now, and zombies used to be alive.
"Think of how stupid the average person is. Then realize half of 'em are stupider than that." - George Carlin
(Score: 2) by takyon on Wednesday October 12 2022, @08:11AM
https://www.businessinsider.com/elon-musk-blocks-starlink-in-crimea-amid-nuclear-fears-report-2022-10 [businessinsider.com]
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]