https://www.sec.gov/Archives/edgar/data/1418091/000119312522120474/d310843ddefa14a.htm

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44504270)

Want to make sure im prioritizing your needs correctly.

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44504303)

[as a bonus, if Twitter misstated materially its user #'s in past filings, there will likely be a class action suit.]

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44504413)

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44504473)

This took me under .5.

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44504489)

From AB Stable VIII LLC v. Maps Hotels and Restaurants: The ordinary course of business covenant recognizes that the buyer has contracted to buy a specific business with particular attributes that operates in an established way. Therefore, even without a change in valuation, a significant change in how the business operates can threaten the fundamentals of the deal. Provides an additional and greater level of protection to ensure that the business of the target will be substantially the same at closing as it was on the date the agreement was signed.

If MAE fails this is usually second resort to get out of the deal.

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44504765)

He did the same with crypto.

1. Acts supremely interested in BTC, as if he's learning about it for the first time (8 years after it was created, and he's a paypal inventor)

2. publicizes buy-in

3. Acts shocked to learn about energy consumption (months later)

4. publicly criticizes btc, crashes it

Its just nonstop manufactured drama

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44504471)

He has a duty to keep producing CONTENT.

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44504484)

LOL @ anyone who thinks twitter traffic is < 5% bot.

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44504317)

Have you ever followed a random conversation/interactions with like a Musk Tweet? Click through on who retweets/answers and look at their bios/timelines and see if you think they’re real people.

Twitter is just a tool for them to push out a message and give it the veneer of legitimacy/public support, that they can launder in articles. It’s function is manufacturing consent, to use a Chomsky term. Same as what a “push poll” function is.

It’s just celebrities (who are on the dole/have scripts to follow), politicians (same), a small army of “journalists” and lib blue checkmarks who propagate out these opinions, and the rest is an army of millions of bots to retweet and give an aura of interaction.

Real non-celebrity actual people are a small percentage of the whole thing.

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44504514)

What would twtr be trading at right now but for the musk bid? It was in the 30s in March. ARKK has gone down about 30% since March. I could definitely see Twitter trading at 20s or lower but for Musk

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44504967)

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44504651)

There's a 10b-5 rep (section 4.7). The 10b-5 rep is a material warranty. The # of active users is info that has to be reported since it goes to the calculation of revenues/profits and hence falls under the 10b-5 rep, and if misstated by more than 5% would be material. Under 7.2(b)(i), the 10b-5 rep has to be true as of the time of the merger. So Elon can walk if Twitter materially misstated user #'s.

Pertinent provisions quoted below. (The 5% threshold is from 2d Cir. caselaw and SEC guidance we are all familiar with.)

"Section 4.7 Information Supplied. None of the information supplied or to be supplied by or on behalf of the Company or any of its Subsidiaries expressly for inclusion or incorporation by reference in the proxy statement relating to the matters to be submitted to the Company’s stockholders at the Company Stockholders’ Meeting (such proxy statement and any amendments or supplements thereto, the “Proxy Statement”) shall, at the time the Proxy Statement is first mailed to the Company’s stockholders and at the time of the Company Stockholders’ Meeting to be held in connection with the Merger, contain any untrue statement of material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading at such applicable time, except that no representation or warranty is made by the Company with respect to statements made therein based on information supplied, or required to be supplied, by Parent or its Representatives in writing expressly for inclusion therein. The Proxy Statement will comply as to form in all material respects with the provisions of the Securities Act and the Exchange Act, and the rules and regulations promulgated thereunder."

***

(b) (i) each of the representations and warranties of the Company contained in this Agreement (except for the representations and warranties contained in Section 4.2(a) and Section 4.2(b)), without giving effect to any materiality or “Company Material Adverse Effect” qualifications therein, shall be true and correct as of the Closing Date (except to the extent such representations and warranties are expressly made as of a specific date, in which case such representations and warranties shall be so true and correct as of such specific date only), except for such failures to be true and correct as would not have a Company Material Adverse Effect; and (ii) each of the representations and warranties contained in Section 4.2(a) and Section 4.2(b) shall be shall be true and correct in all material respects as of the Closing Date (except to the extent such representations and warranties are expressly made as of a specific date, in which case such representations and warranties shall be so true and correct in all material respects as of such specific date only); and

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44504692)

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44507399)

Why did he tweet he was asking for confirmation? What provision governs?

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44504714)

Section 6.4 Access to Information; Confidentiality. UPON REASONABLE NOTICE, the Company shall (and shall cause each of its Subsidiaries to) afford to the representatives, officers, directors, employees, agents, attorneys, accountants and financial advisors (“Representatives”) of Parent reasonable access ... upon reasonable written notice [redundancy in original] ... to the properties, books and records of the Company and its Subsidiaries and, during such period, shall (and shall cause each of its Subsidiaries to) furnish promptly to such Representatives all information concerning the business, properties and personnel of the Company and its Subsidiaries as may reasonably be requested in writing, in each case, for any reasonable business purpose related to the consummation of the transactions contemplated by this Agreement[.]

(emph. via all-caps).

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44505305)

relevant to rep in 5.5 on information supplied, ie u claim less than 5% FRAUD user$ now prove it (u can’t)?

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44505375)

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44505381)

Elon has a duty to make best efforts (mutual covenant) to make deal happen and to notify Twitter of any breach or threatened breach of the financing conditions.

Twitter could amend its consolidated financials for the last period.

Hence, what Elon is doing is threatening Twitter that they will either have to correct their financials (suffering decline in value and bettering his position) or else he'll potentially be entitled to the $1bn break fee.

[[[On materiality: note 9.3(c) ("When used in reference to the Company or its Subsidiaries, the term 'material' shall be measured against the Company and its Subsidiaries, taken as a whole."); 1.01 (noting the agreement "may apply contractual standards of 'materiality' that are different from 'materiality' under applicable securities laws").]]]

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44505363)

Elon said, "Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users." https://twitter.com/elonmusk/status/1525049369552048129

Elon linked to a Reuters article reporting on an SEC disclosure that Twitter had made a few days after the parties enter into the merger agreement.

The article is here: https://www.reuters.com/technology/twitter-estimates-spam-fake-accounts-represent-less-than-5-users-filing-2022-05-02/

The disclosure referenced in the article is here: https://www.sec.gov/ix?doc=/Archives/edgar/data/1418091/000119312521055879/d274932d8k.htm

The disclosure cautions that it is merely being disclosed under Reg. FD---which prohibits selective disclosure of material nonpublic info, but doesn't implicate the antifraud provisions of the securities laws---and not filed under the Exchange Act or Securities Act.

And the disclosure is wishy-washy in that it seems couched in language of opinion: "Twitter applied significant judgment, so its estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than Twitter has estimated."

* * *

Put all this together with the provisions discussed previous, and it would appear Elon is trying to get Twitter to make specific factual representations that would subject it to liability under the 10b-5 rep.

Note that Twitter has already arguably impliedly conceded the info is material, since it made the Reg FD disclosure.

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44506137)

Check out Section 7.2(b) (quoted in full below) which says: "each of the representations and warranties contained in Section 4.2(a) and Section 4.2(b) shall be shall be true and correct in all material respects as of the Closing Date (except to the extent such representations and warranties are expressly made as of a specific date". It says "all material respects" not MAC, implying that there's a lower threshold for materiality.

The rest of the analysis is as above.

****REST OF POAST IS QUOTATION FROM AGREEMENT****

Section 7.2 Conditions to the Obligations of Parent and Acquisition Sub.

The obligations of Parent and Acquisition Sub to consummate the Merger, are, in addition to the conditions set forth in Section 7.1, further subject to the satisfaction or waiver by Parent at or prior to the Effective Time of the following conditions:

(a) the Company shall have performed or complied, in all material respects, with its obligations required under this Agreement to be performed or complied with by the Company on or prior to the Closing Date;

(b)(i) each of the representations and warranties of the Company contained in this Agreement (except for the representations and warranties contained in Section 4.2(a) and Section 4.2(b)), without giving effect to any materiality or “Company Material Adverse Effect” qualifications therein, shall be true and correct as of the Closing Date (except to the extent such representations and warranties are expressly made as of a specific date, in which case such representations and warranties shall be so true and correct as of such specific date only), except for such failures to be true and correct as would not have a Company Material Adverse Effect; and

(ii) each of the representations and warranties contained in Section 4.2(a) and Section 4.2(b) shall be shall be true and correct in all material respects as of the Closing Date (except to the extent such representations and warranties are expressly made as of a specific date, in which case such representations and warranties shall be so true and correct in all material respects as of such specific date only); and

(c) no Company Material Adverse Effect shall have occurred and be continuing.

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44506649)

Every word Musk says is money one way or another.

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44505376)

If he was trading penny stocks in his own account he could tweet “Taking a look at $shitco” and shitco would go up 1 million percent and there is zero misrepresentation.

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44507388)

or otherwise what is the reverse termination fee he would have to pay if he submarines the financing?

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44506293)

You’re describing fraud, and they agree in the contract that they’re not doing fraud.

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44508272)

https://twitter.com/gavinjohnadams/status/1525126707094642689

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44509948)

On breach, he misses the crucial point that the statement Twitter filed is not literally false or materially misleading since it was filed under Reg FD and it is a statement about Twitter's perhaps-subjective judgment. (See http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44506137).

He gives no analysis of materiality.

He gives no analysis of the parties' respective obligations under the various agreements with respect to termination, instead broadly stating that "If @twitter has breached or failed to perform any of its representations warranties etc. then (under certain circumstances) @elonmusk could potentially walk away."

And he does not even attempt to analyze the parties' respective negotiating postures or the overall background of the deal (e.g., changing market and regulatory conditions).

The overall effect is of listening to a man try to narrate a chess match by describing carved features of a few of the pieces.

I rate the analysis as very good as far as Twitter legal analyses go (they are almost uniformly awful). But the guy is a poseur.

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44510428)

BTW there is a reason the people who do this for a living get paid.

(http://www.autoadmit.com/thread.php?thread_id=5108236&forum_id=2#44510726)