It also does not make sense to do this kind of fraud, as Tesla stock will surely tank on the news of it being used as a collateral in an acquisition deal.
Nah, the "everything is securities fraud" trope is qbout some (usually immoral) behavior that a shareholder argues would materially affect the stock price, and which was not disclosed to shareholders.
Elon Musk announcing some M&A news with the intent of effecting price changes in TWTR,TSLA securies would be pretty boring, vanilla securities fraud.
Though it's weird to me that it's fine to sell stock just because you want to, but pretending you didn't want to could qualify as securities fraud.
And that seems to be what the concern boils down to? The issue of whether he defrauded twitter is a separate thing. (Though I'm inclined to say no, because twitter came at this in a very skeptical and careful way, and normal fraud requires fooling someone into material loss.)
Having driven Twitter's value down by $15B, I can't imagine Musk won't be sued by shareholders for it, since his claims of fake accounts are as yet unproven. The same goes for the damages this little venture has inflicted on Tesla stock. The SEC and FTC are likely to cost Musk Enterptises a pretty penny in legal fees before all of this ends.
The $1B penalty for backing out of the Twitter deal is the least of Musk's concerns.
it's somewhat hard to argue that musk is responsible for the decline given that the entire NASDAQ is also down. you might be able to find some contribution, but only a relatively small amount of it.
But Musk set the price at $54 by agreeing to buy Twitter at that price. If this deal were guaranteed to go through, shares should be trading at that price until the sale is complete. Trading at above that price means shareholders would lose money at closing, and trading at below means someone is leaving money on the table. Market forces should cause the price to converge at $54.
The fact that it’s trading lower means that investors don’t expect the deal to go through. And who exactly as been doing his best to very publicly bring the deal into question? Elon Musk.
If he was the only thing dragging twitter toward $54, and then he stops dragging it as hard, it's hard for me to see that as driving value down. If he hasn't caused any other damage, that's just twitter returning to its natural value.
> Sure, let’s pretend the entire market hasn’t sunk.
Why does that matter? Musk agreed to buy Twitter for $44 billion. If he comes through, that's the value of Twitter. If he doesn't, then the value is something else. The difference between $44 billion and fair market value is just the expectation of investors that Musk really will pay. So yeah the drop really _is_ due to Musk trying to back out of the deal. If Musk weren't backing out of the deal, then then Twitter's value shouldn't drop regardless of the fact that the rest of the market has.
Mens rea is a necessary but not sufficient component of proving a criminal charge - the defendant intended to break the law. Actus reus is also required, which is actually doing the act.
US law doesn't "judge by intent". If you try to murder someone but you don't succeed, you don't get charged with murder.
Yes, I agree with you and I should have worded my comment better.
To keep with the murder example, intent is what separates 3v2, in most states. Yes, a crime was committed but was the intent to cause bodily harm vs actions causing bodily harm, without intent.
As Levine has repeatedly stated he didn’t “waive due diligence”. It was a binding purchase agreement. It’s meant to come after all of the due diligence.
He didn’t waive his right. He just opted not to do any before buying.
We've had the Teflon Don, now we have the Teflon Elon.
I'm sure he'll be able to weasel his way out of this. He'll spend a crap ton of money to lawyers just to be able to say he doesn't have to pay for it, but he's still paying for it on a smaller scale and not in public. Anything to put up another W on the scoresheet.
The counter point here is that the Twitter board is not poor, and the incentives to force the buyout (or at least extract more money from Musk) are huge.
Yes, and they are the side I'm cheering for in this match. Even if Musk is forced to pay, I doubt it will slow his twitter tirades down. In fact, I'd expect him to come out harder to prove whatever his little ego thinks needs to be proven.
Applying unrelated leverage between two parties is usually not looked at favorably by court. And court is likely where the musk/twitter thing will be settled.
There is no option 2. That was a proviso in case Elon was unable to secure financing. He secured financing, so now he has to buy Twitter. Or they can sue him.
The clause about the $1B penalty says nothing about separation. That clause only activates if the deal is stopped by some outside entity, such as the SEC, or if the two parties mutually agree to stop the process.
In all other cases, Elon has committed to give them $44B in exchange for the company.
What reads like simple English to you or I does not get read the same way by lawyers. Once lawyers are involved, all reasonable logic goes out the window in my perspective.
Ever since what "the definition of 'is' is", my whole outlook on lawyers was just obliterated.
Not for sure why you're downvoted, because you're right. Lawyers do not operate on logical basis. They operate on interpretations of logic. I found this out when buying my house. Interacting with the lawyers was completely miserable because they live in their own little world. They expected me to just know things that they would poorly specify, requiring several emails to clarify, and then when I would point out mistakes, logical inconsistencies, or poorly defined things in the contract, they would just shrug it off or sort of grudgingly fix them, seemingly just to appease me. Then they would just dig their heels in the ground about what the contract "says" because the contract "says so", even though it made no logical sense. Because the contracts aren't what they say logically. They say what they say based upon a sort of colloquially agreed upon interpretation of them. Lawsuits then center around this colloquial agreement and not around the contractual logic. It's an excruciatingly frustrating world to be introduced to. I wish to never have to deal with lawyers.
> Ever since what "the definition of 'is' is", my whole outlook on lawyers was just obliterated.
Is that in reference to something? Got a link or an article or something?
>Is that in reference to something? Got a link or an article or something?
Very much yes[0]. It was one of the defensive lines from Bill Clinton. I was still in high school during this, and it set me on a very bad path of thinking how to twist anything and everything anyone ever said. After all, if the pres can do it, then we should all be able to do it.
I have accepted that I will eventually see Musk put behind bars--all of a sudden--by the SEC. I get the sense that they are always building a case on him. He would be a great "Martha Stuart."
SEC can only levy civil penalties, criminal (aka jail) is another matter. Which they are happy to refer to the relevant prosecutor, it just isn’t their job at that point.
