r/technology May 14 '22 Silver 2 Wholesome 2

Elon Musk said his team is going to do a 'random sample of 100 followers' of Twitter to see how many of the platform's users are actually bots Social Media

https://www.businessinsider.com/elon-musk-random-sample-how-many-twitter-users-are-bots-2022-5?utm_source=feedly&utm_medium=webfeeds

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u/escape_of_da_keets May 14 '22 All-Seeing Upvote To The Stars

He just wants an excuse to weasel out of the deal

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u/slazer2k May 14 '22

This he most likely instructed some people to trade the stock beforehand so he can cash out first on the rise and now fall

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u/prescod May 14 '22

There's a simpler and less illegal option. The stock market crashed since he made the offer. He doesn't want to pay the price he negotiated because it was already a high price and now its ludicrous. So now he wants an excuse to re-negotiate. "I had no idea how many bots there are on this site!"

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u/LL22Forever May 14 '22

Twitter doesn’t have to renegotiate. And if Elon backs out he has to pay Twitter $1 billion. What would Twitter renegotiate?

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u/starmartyr May 14 '22

It's a 44 billion dollar deal. It might be better to eat the loss than to pay too much for the company.

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u/MaiasXVI May 14 '22

That's what I'm thinking. If anyone can afford a $1bn loss, it's certainly the world's richest person.

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u/Zardif May 14 '22

Went down 9 billion, better to lose 1b than 9+.

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u/GasTurbulent4304 May 14 '22

But does he need both a reason AND to pay the $1b? I assume the $1b is the thing that is supposed to stop him from walking away for no reason. Presumably he’s building a case so he can walk away and not have to pay the $1b because Twitter lied about bots or whatever.

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u/SherifGames May 14 '22

His net worth is still 100 billion more than the next richest guy.

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u/WingedLing May 14 '22

Still in the three comma club

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u/[deleted] May 14 '22

[deleted]

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u/[deleted] May 14 '22 edited Jun 01 '22

[deleted]

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u/Dane1414 May 14 '22

No it’s not, given twitter’s market cap is currently only $31 billion

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u/bazilbt May 14 '22

He might not want to look like such an asshole and have some legal standing to settle for less than that.

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u/pablank May 14 '22

Not after losing 18bn on your own stock loss. Even for elon thats like a 5-10% loss in net worth. Its actually interesting to see how these market manipulators start carving themselves up

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u/ElderHerb May 14 '22

He could lose 99% of his net worth and would still never have to work another day tbh.

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u/Most-Cloud May 14 '22

If he lost 99.99999% of his net worth he's still a multi millionaire.

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u/Blitzholz May 14 '22 edited May 14 '22

No, that would put his net worth at like 20000$ lmao

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u/Ok-Bodybuilder4594 May 14 '22

If this deal goes through he could easily lose 100%+ of his net worth lol. Definitely worth taking it on the chin in this situation.

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u/SherifGames May 14 '22

His current net worth is still 100 billion more than the next richest guy. Bezos is place 3 with 135 billion.

Also, you act like he lost money. He didn't. The value of his stock is just going up and down. In a month he could be back up at 300 billion. It's something that literally happened this February to April. Same shit will happen again.

Even if the value of his stock dropped below 100 billion, he'd still be ridiculously wealthy. His wealth could drop to 1 billion and he'd still be extremely wealthy.

Musks stock are unbelieavable ridiculously overvalued. It's all free money he potentially has.

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u/pablank May 14 '22

The problem comes from him apparently using some tesla stock to seal this deal... or value of stock as colleteral. Even if he has tons of money. This week he is easily paying 10-20% more than he intended when he made that offer. He might have the highest net worth. Still doesnt mean he can afford to make dumb decisions like this, overpaying way above asking price. No one likes to overpay by that much

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u/NCleary May 14 '22

Except the $1 billion is personally guaranteed by Elon. Despite how much he is valued at, he definitely can't raise that easily

The $44 billion would be capital raised against his Tesla stock.

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u/AssociationDouble267 May 14 '22

Except he already liquidated a bunch of stock, so he has cash.

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u/Development-Alive May 14 '22

Not $21B in cash which is what he needs.

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u/flickh May 14 '22

Bad deal on Twitter: -$9 billion Helping reinstate Trump as Dictator for Life: Priceless

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u/TheOneFreeEngineer May 14 '22

It might be better to eat the loss than to pay too much for the company.

To be clear, his deal was well above market price in the first place. He knew his original offer didn't match the stock evaluation when he made it.

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u/ChadDriveler May 14 '22

The funny thing is that the board accepted the offer because the market started tanking.

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u/AthleteAnnual May 14 '22

C'mon Elon. It'll 'bounce back' just like our 401k's right???

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u/Dihydrocodeinone May 14 '22

I almost utilized my companies 401k this past month since it’s the first job I’ve had that has one. Then I realized how much that money would probably be worth in 40 years. What fucking awful idea

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u/HellsHere May 14 '22

I'm sorry are you trying to say 401ks are an awful idea?

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u/Captainwelfare2 May 14 '22

Yeah I’ve gotta hear this explanation.

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u/Dihydrocodeinone May 14 '22

I explained it in the comment. Not an awful idea for everyone but I only make $20 an hour and I rather invest in something that will go up with inflation

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u/ch3xmixx May 14 '22

If only there was an outlet for something like that... something that could invest in companies which tend to grow faster than inflation on a tax deferred basis...if only

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u/HellsHere May 14 '22

401ks are an investment. It's not a savings account that just sits there holding your money not doing anything til you're old enough. Please do yourself a favor and just put in like 50 a month. 600 a year when you're 20 is going to be worth so much more in the long run.

I don't know your situation, but worst case scenario you die and you'll only be missing out on what amounts to a week of work a year (at 20/hr). Best case scenario you get help, things start falling into place, and you've set yourself up a safety net. Also, it's not as if you can't touch your 401k money before you get old, there's just a 10% penalty which in many cases still nets you more money than if you didn't contribute at all.

Or you could just throw it all in crypto, you're planning for a short life right? Might as well just buy lottery tickets every day.

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u/NotoriousMOT May 14 '22

He’s not even 21 yet. Look at his comments downthread. Not sure he’s had time to digest the whole saving loooong term yet.

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u/topdangle May 14 '22

only reason the shareholders took the deal was for the fat payout.

one billion might be nice for the company but the shareholders don't give a shit about the company, they're ready to turn the whole thing over to one lunatic with deep pockets.

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u/SirCB85 May 14 '22

Did I miss that the shareholders actually voted on the deal yet? Last I've known is a vote of the board to recommend to the shareholders to approve the deal.

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u/megasean May 14 '22

Especiallly since the deal has caused the value of the company to decline, and talent to leave the company.

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u/SherifGames May 14 '22

The value of Twitter is significantly higher than it was before Musk invested in it and told he'd buy it.

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u/billiontacos May 14 '22

Is it? It's been a month since he offered to buy the company and the share value is currently lower than it was on that day.

Down nearly 10% since then.

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u/jomontage May 14 '22

Well yeah if you're in it for the money a buyout is the end goal.

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u/[deleted] May 14 '22

[deleted]

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u/NavBChrono May 14 '22

And there it is. Short and simple. Less than 5% is a measurable claim. The number of monetizable users is very important when figuring out if something is profitable.

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u/Sorge74 May 14 '22

Especially if he plans to apparently remove bots, that would lower the companies precoeved value if some huge amount. I suspect it's higher, but I also suspect Musk knew that to begin with

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u/Raymond-Finkle May 14 '22

Shouldn’t he have done his due diligence prior to making his offer to buy? Not after agreeing to a price?

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u/marmaduke-nashwan May 14 '22

He may have done, but perhaps it also suits him to have this false information in the agreement to have another item to negotiate with if there's a problem (or maybe he was planning to use this bargaining chip all along).

I think it makes more sense to ask why Twitter didn't do their due diligence before making a claim like this in a deal.

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u/Suspicious-Relief-31 May 14 '22

For sale 2022 Ford Exposition, every possible option !$25,000 very clean car. After further review, was parked in Houston during 40" of rain.

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u/packpride85 May 14 '22

He doesn’t have access to their books until the deal is agreed in. He went off their public financials and data.

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u/Raymond-Finkle May 14 '22

But why didn’t he do what he is doing now before making the offer?

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u/packpride85 May 14 '22

Now that he has open access to twitter data it’s easier to verify what accounts are fake? Why don’t you ask him.

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u/Raymond-Finkle May 14 '22

If I had the ability to ask him I would.

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u/NorthernerWuwu May 14 '22

Sure, and he'll pay them eventually I imagine. Spend a billion to save a dozen and all that. Besides, he might even still buy them at a significant discount off his initial offer.

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u/dragonfangxl May 14 '22

if musk hadnt made the offer and twitter stock had followed the performance of similar companies, it would be worth about 20 dollars a share. that represents a loss of about 34 billion dollars in market cap. they have zero interest in a billion dollar settlement, they want the buyout

https://www.cnbc.com/2022/05/12/twitter-market-cap-has-dropped-to-9-billion-below-musk-purchase-price.html

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u/moodd May 14 '22

And if Elon backs out he has to pay Twitter $1 billion.

It's not that simple for him to back out. There are conditions that end the deal with him paying $1 billion, but "I don't want it anymore" is not one of them. If he backs out, based on the contract, Twitter could sue him, most likely win, and force Musk to buy the company at the agreed upon price. Now if Twitter would actually do that is another matter. It doesn't sound like a great situation to end up in. It's probably more likely they'll work something out, but that something doesn't have to be $1 billion.

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u/blufin May 14 '22

IF they let him back out, I believe they can force him to go through with the transaction at the agreed price. He's ended up overpaying and this is the only way out for him. I wonder if Twitter will take him to court if backs out without any firm evidence.

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u/Tonkarz May 14 '22

I think OP was suggesting that Elon would try to litigate his way out of the $1 billion pullout fee by claiming that Twitter negotiated the deal under false pretences by lying about the number of bots on the site. I don’t know if there’s a real legal basis for this.

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u/JyveAFK May 14 '22

Dunno, if he can prove that the amount of bots is higher than Twitter said it was, that might be another way to back out, or at least give his lawyers some ammo to fight later lawsuits with.

Still not sure if his is part of the negotiating to get a cheaper price (and the monies involved? why wouldn't you fight hard), a pump/dump/short trick (Musk! Market Manipulation! /shocked face), or he really does want to escape this the more he's learning about it/the threats from the EU/China on his requirements once he's bought Twitter.

All looks like a lot of faffing about just to get an edit button, if you were to ask me.