1 00:00:10,560 --> 00:00:13,920 Speaker 1: Hello, and welcome to another episode of the Add Thoughts Podcast. 2 00:00:14,000 --> 00:00:17,319 Speaker 1: I'm Tracy Alloway and I'm Joe Wish. Joe, do we 3 00:00:17,880 --> 00:00:20,560 Speaker 1: do we want Elon Musk to buy Twitter? At this point, 4 00:00:20,640 --> 00:00:24,639 Speaker 1: I can't decide, Like I feel uncomfortable with the idea 5 00:00:24,680 --> 00:00:29,480 Speaker 1: of him owning Twitter, given um, you know, the way 6 00:00:29,520 --> 00:00:32,760 Speaker 1: he is, I guess, But then secondly, I really like 7 00:00:33,479 --> 00:00:36,400 Speaker 1: I also want him to feel the full force of 8 00:00:36,479 --> 00:00:39,680 Speaker 1: contract law and not get away with trashing the US 9 00:00:39,760 --> 00:00:44,720 Speaker 1: legal system. Okay, my stance on this is I really 10 00:00:44,840 --> 00:00:47,720 Speaker 1: like the way Twitter is currently run because it doesn't 11 00:00:47,720 --> 00:00:50,120 Speaker 1: seem like it's a great business, but it has these 12 00:00:50,120 --> 00:00:52,640 Speaker 1: positive externalities, like I get a lot of value out 13 00:00:52,640 --> 00:00:55,120 Speaker 1: of it as a journalist, and it hasn't changed action. 14 00:00:55,160 --> 00:00:57,840 Speaker 1: They haven't really ruined the product. So I like it 15 00:00:57,880 --> 00:01:01,160 Speaker 1: the way it is, and I wanted to never evolve 16 00:01:01,360 --> 00:01:05,000 Speaker 1: or improve or anything. And I'm worried, and I'm worried 17 00:01:05,000 --> 00:01:07,280 Speaker 1: that if it's ever run like a really good business 18 00:01:07,720 --> 00:01:10,720 Speaker 1: that it will be worse for me. And so I don't, 19 00:01:10,800 --> 00:01:13,080 Speaker 1: you know, I don't care if it's Elon or anyone else. 20 00:01:13,120 --> 00:01:15,280 Speaker 1: I just don't want anyone running it who actually like 21 00:01:15,480 --> 00:01:19,240 Speaker 1: has some good ideas about how to fix it. Okay, Well, 22 00:01:20,000 --> 00:01:22,200 Speaker 1: on that note, and without further ado, we are going 23 00:01:22,240 --> 00:01:25,720 Speaker 1: to be talking about all of the thorny questions um 24 00:01:25,720 --> 00:01:29,600 Speaker 1: thrown up by the Elon Musk Twitter saga, which is 25 00:01:29,640 --> 00:01:32,800 Speaker 1: now devolved into a court battle. You know, it started 26 00:01:32,840 --> 00:01:37,399 Speaker 1: stupidly with um D versus thirteen G stuff, and it 27 00:01:37,440 --> 00:01:41,640 Speaker 1: seems like inevitably is going to end stupidly and in tears, 28 00:01:41,760 --> 00:01:44,800 Speaker 1: in some sort of drawn out legal drama. So who 29 00:01:44,800 --> 00:01:47,120 Speaker 1: do we call for legal drama? Who knows about Twitter 30 00:01:47,160 --> 00:01:49,360 Speaker 1: and Elon? I don't know. Do we know anyone? Yeah? 31 00:01:49,600 --> 00:01:52,320 Speaker 1: We do. Uh. Matt Levin is with us to talk 32 00:01:52,360 --> 00:01:55,120 Speaker 1: about everything that's going on. Matt, thank you so much 33 00:01:55,160 --> 00:01:58,720 Speaker 1: for coming back on all thoughts. Hey guys, it's it's 34 00:01:58,840 --> 00:02:03,920 Speaker 1: terrible to be here. That's fair. That's fair. Um. Okay, 35 00:02:04,040 --> 00:02:07,200 Speaker 1: let's start with the first question. Elon Musk backing out 36 00:02:07,200 --> 00:02:10,080 Speaker 1: of the Twitter deal. I think Twitter stock is down 37 00:02:10,120 --> 00:02:13,560 Speaker 1: something like since the deal was announced. Um, it was 38 00:02:13,600 --> 00:02:16,160 Speaker 1: a forty four billion dollar offer back then it is 39 00:02:16,200 --> 00:02:19,840 Speaker 1: not now? Is this just a tactic by Elon to 40 00:02:20,360 --> 00:02:23,639 Speaker 1: try to get a lower price? I have no idea, man, 41 00:02:23,680 --> 00:02:26,240 Speaker 1: I write about this every day and I have no 42 00:02:26,919 --> 00:02:31,040 Speaker 1: visibility into the way his mind works. I mean, like 43 00:02:31,120 --> 00:02:33,400 Speaker 1: a first level analysis here is that he's like an 44 00:02:33,400 --> 00:02:37,800 Speaker 1: extremely whimsical guy. He whimsically wanted to buy Twitter, he 45 00:02:37,919 --> 00:02:40,919 Speaker 1: got bored with it, and now he wants to walk away. 46 00:02:40,960 --> 00:02:44,120 Speaker 1: That's my best guess about what's going on. And so 47 00:02:45,000 --> 00:02:47,400 Speaker 1: he is not really looking to re cut a deal 48 00:02:47,440 --> 00:02:49,399 Speaker 1: at a lower price. He's really looking to get out 49 00:02:49,400 --> 00:02:51,600 Speaker 1: of it. Um, that's it. I mean, it is clear 50 00:02:51,680 --> 00:02:54,200 Speaker 1: that one thing that changed between the time that he 51 00:02:54,320 --> 00:02:56,360 Speaker 1: enthusiastically wanted to buy Twitter and the time that he 52 00:02:56,400 --> 00:02:58,480 Speaker 1: wanted to get out of buying Twitter is that the 53 00:02:58,520 --> 00:03:02,160 Speaker 1: market went down. You know, Twitter is a less valuable company, 54 00:03:02,320 --> 00:03:04,760 Speaker 1: but also kind of more to the point, Tesla is 55 00:03:04,800 --> 00:03:06,840 Speaker 1: a much less valuable company, and he was sort of, 56 00:03:06,880 --> 00:03:08,680 Speaker 1: you know, going to pay for this out of like 57 00:03:08,720 --> 00:03:10,960 Speaker 1: pocket change from selling a few Tesla shares, And now 58 00:03:11,000 --> 00:03:14,160 Speaker 1: that is a somewhat more expensive proposition for him. And 59 00:03:14,240 --> 00:03:16,839 Speaker 1: so it is like clearly the case that like economically 60 00:03:16,880 --> 00:03:18,600 Speaker 1: this deal is worse for him, and if he recut 61 00:03:18,639 --> 00:03:21,600 Speaker 1: the deal at a lower price, it would be more acceptable. 62 00:03:21,919 --> 00:03:24,080 Speaker 1: But I don't know, I mean, like he's just going 63 00:03:24,160 --> 00:03:26,960 Speaker 1: around trashing Twitter all the time, and it seems like 64 00:03:28,360 --> 00:03:30,400 Speaker 1: that would not be a great strategy if you then 65 00:03:30,480 --> 00:03:32,680 Speaker 1: wanted to close the deal, even at a lower price. 66 00:03:32,919 --> 00:03:36,120 Speaker 1: All right, I we pride ourselves at odd Lots for 67 00:03:36,200 --> 00:03:39,600 Speaker 1: asking the stupid questions that everyone else is afraid to ask. 68 00:03:39,800 --> 00:03:42,520 Speaker 1: So I'm going to ask the big question that listeners 69 00:03:42,520 --> 00:03:47,000 Speaker 1: will really appreciate. Uh. Someone finally saying out loud, what 70 00:03:47,280 --> 00:03:50,040 Speaker 1: is a chancery? Why do they tell at the Delaware 71 00:03:50,120 --> 00:03:53,120 Speaker 1: chancery courts? What is that word? Even me? God, I 72 00:03:53,160 --> 00:03:56,760 Speaker 1: feel like I'm going to get this wrong. Um, so okay, 73 00:03:56,960 --> 00:03:59,760 Speaker 1: So like here's here's like I went to I went 74 00:03:59,800 --> 00:04:01,400 Speaker 1: to the school a long time ago. I'm gonna try 75 00:04:01,440 --> 00:04:03,720 Speaker 1: to remember. I'm gonna do my best to remember. But now, 76 00:04:03,760 --> 00:04:06,920 Speaker 1: so like in like old school, like English common law, 77 00:04:07,280 --> 00:04:10,600 Speaker 1: and like you know, there were two things. There was 78 00:04:10,920 --> 00:04:13,040 Speaker 1: a court of law and a court of equity, and 79 00:04:13,120 --> 00:04:15,680 Speaker 1: like law was you know, this is not quite right, 80 00:04:15,760 --> 00:04:18,920 Speaker 1: but sort of like intuitively law was like written sort 81 00:04:18,920 --> 00:04:21,760 Speaker 1: of like clear law, and then equity was like wow, 82 00:04:21,800 --> 00:04:24,599 Speaker 1: we do it's fair, and the world sort of evolved 83 00:04:24,600 --> 00:04:27,479 Speaker 1: from then that distinction. You know, like there are not 84 00:04:27,640 --> 00:04:30,359 Speaker 1: different courts like that in most of America, and the 85 00:04:30,400 --> 00:04:32,440 Speaker 1: distinction between law and equity as a sort of like 86 00:04:32,560 --> 00:04:34,440 Speaker 1: legal matter is like a little blurrier that it used 87 00:04:34,480 --> 00:04:37,280 Speaker 1: to be, but people still talk about it. In Delaware, 88 00:04:37,600 --> 00:04:40,200 Speaker 1: there remains a court of equity, which is called the 89 00:04:40,240 --> 00:04:43,320 Speaker 1: Court of Chancery, and they do They have sort of 90 00:04:43,360 --> 00:04:47,000 Speaker 1: a narrow set of jobs, but the main one is 91 00:04:47,040 --> 00:04:49,760 Speaker 1: they do corporate law. So like all like murder, so 92 00:04:49,880 --> 00:04:53,719 Speaker 1: every not every nineties something percent of like big US 93 00:04:53,800 --> 00:04:57,599 Speaker 1: corporations are incorporated in Delaware and are subject to Delaware law, 94 00:04:57,839 --> 00:05:00,599 Speaker 1: and most murder agreements are subject to Delaware. And so 95 00:05:00,680 --> 00:05:03,560 Speaker 1: when there's a big dispute about a merger about corporate governance, 96 00:05:03,560 --> 00:05:06,000 Speaker 1: generally it's usually in Delaware court, and it's in the 97 00:05:06,000 --> 00:05:08,520 Speaker 1: Delaware Court of Chancery, which has like a handful of 98 00:05:08,600 --> 00:05:12,039 Speaker 1: judges who are experts in business law. They also do 99 00:05:12,080 --> 00:05:13,640 Speaker 1: some other stuff. I think they like the family Court 100 00:05:13,720 --> 00:05:16,000 Speaker 1: or something. They have like some weird sort of set 101 00:05:16,000 --> 00:05:17,839 Speaker 1: of cases. But like the one that you hear about 102 00:05:17,920 --> 00:05:21,080 Speaker 1: is they do all the merger cases class action lawsuits 103 00:05:21,160 --> 00:05:26,080 Speaker 1: and the judges no no class action well depends uh 104 00:05:26,200 --> 00:05:29,120 Speaker 1: not securities class actions. They do like corporate law, Like 105 00:05:29,880 --> 00:05:31,479 Speaker 1: there's a there's a kind of class actional they do, 106 00:05:31,480 --> 00:05:34,120 Speaker 1: but like not not securities class actions, but they are 107 00:05:34,240 --> 00:05:36,640 Speaker 1: you know, there's like a handful of judges and they're 108 00:05:36,640 --> 00:05:38,919 Speaker 1: called chancellors. Actually they're called vice chancellor. Is one of 109 00:05:38,920 --> 00:05:43,320 Speaker 1: them is the chancellor and they sort of develop the 110 00:05:43,360 --> 00:05:45,560 Speaker 1: doctrine of of like when mergers have to close and 111 00:05:45,560 --> 00:05:49,240 Speaker 1: stuff like that. So, how hard is it in this 112 00:05:49,320 --> 00:05:52,400 Speaker 1: court to argue that there has been a material change 113 00:05:52,480 --> 00:05:56,159 Speaker 1: or misrepresentation that should let you, in theory, get out 114 00:05:56,160 --> 00:05:59,599 Speaker 1: of a deal, Like, are there any historical examples of that? Actually? 115 00:05:59,720 --> 00:06:02,359 Speaker 1: Six eating So for so Musk is are you a 116 00:06:02,360 --> 00:06:05,040 Speaker 1: couple of things? I mean, first of all, we're talking 117 00:06:05,040 --> 00:06:08,560 Speaker 1: about this on Wednesday, July. Twitter has just sued Musk 118 00:06:08,600 --> 00:06:10,680 Speaker 1: to close the deal. Musk has not filed any sort 119 00:06:10,720 --> 00:06:12,719 Speaker 1: of reply in courts, So Musk is not really We 120 00:06:12,720 --> 00:06:15,400 Speaker 1: probably should have mentioned so that in the intro that yes, 121 00:06:15,560 --> 00:06:18,320 Speaker 1: last night, less than twenty four hours ago before recording this, 122 00:06:19,279 --> 00:06:23,000 Speaker 1: Twitter did file this lawsuit against Musk forcing attempting to 123 00:06:23,040 --> 00:06:25,559 Speaker 1: force him to close the deal. Yeah, so we haven't 124 00:06:25,560 --> 00:06:28,080 Speaker 1: seen anything from from from Musk in courts, so we 125 00:06:28,120 --> 00:06:30,039 Speaker 1: don't know exactly what his arguments are. But what we 126 00:06:30,080 --> 00:06:32,840 Speaker 1: do have is his letter to Twitter terminating the deal, 127 00:06:33,279 --> 00:06:35,800 Speaker 1: or I guess you should say, purporting to terminate the deal, 128 00:06:36,040 --> 00:06:37,840 Speaker 1: and that lists his reasons why he thinks he can 129 00:06:37,839 --> 00:06:39,760 Speaker 1: get out of the deal. One of them, as you say, 130 00:06:39,839 --> 00:06:41,760 Speaker 1: is that there might have been or there might be 131 00:06:41,839 --> 00:06:45,000 Speaker 1: a material adverse effect on Twitter. Famously, there's sort of 132 00:06:45,040 --> 00:06:48,520 Speaker 1: been one Delaware court decision ever finding a material adverse effect, 133 00:06:48,839 --> 00:06:51,479 Speaker 1: and there's sort of a rule of thumb that the 134 00:06:51,520 --> 00:06:55,679 Speaker 1: Delaware chancellors used that like a sustained drop an income 135 00:06:55,720 --> 00:07:01,000 Speaker 1: of like is a material adverse effect. Basically, the view 136 00:07:01,040 --> 00:07:03,480 Speaker 1: is that it's a very high standard. And when one 137 00:07:03,520 --> 00:07:05,680 Speaker 1: aspect of it is like when you say material adverse effect, 138 00:07:06,520 --> 00:07:08,760 Speaker 1: there are a lot of things that don't count. So 139 00:07:08,839 --> 00:07:13,120 Speaker 1: like the pandemic is carved out from m as the 140 00:07:13,200 --> 00:07:16,240 Speaker 1: stock market going down is carved out. Things having to 141 00:07:16,280 --> 00:07:18,200 Speaker 1: do with the deal are carved out. So like the 142 00:07:18,240 --> 00:07:21,440 Speaker 1: fact that Elon Musk was going to buy Twitter probably 143 00:07:21,480 --> 00:07:24,640 Speaker 1: drove away some employees and advertisers, but that can't count 144 00:07:24,680 --> 00:07:26,560 Speaker 1: as an m A. The only thing that can count 145 00:07:26,640 --> 00:07:30,600 Speaker 1: is basically, like the company itself blows itself up, and 146 00:07:30,680 --> 00:07:32,840 Speaker 1: that's like an extraordinary high standard, and there's just there's 147 00:07:32,880 --> 00:07:36,200 Speaker 1: just like not not a whisper of anything like that here. 148 00:07:36,360 --> 00:07:40,360 Speaker 1: Now separately, he's arguing that like they have too many bots, 149 00:07:40,800 --> 00:07:44,280 Speaker 1: and that you know, if they have too many bots, 150 00:07:44,520 --> 00:07:46,119 Speaker 1: he can get out of the deal if that would 151 00:07:46,160 --> 00:07:50,600 Speaker 1: cause an m A. Now, if you sort of take 152 00:07:50,640 --> 00:07:53,160 Speaker 1: the maximal reading of Elon Musk's argument, you say, well, 153 00:07:53,200 --> 00:07:56,400 Speaker 1: you know, Twitter has been lying for years to advertisers 154 00:07:56,400 --> 00:07:58,760 Speaker 1: in the public. It has been selling stock and selling 155 00:07:58,800 --> 00:08:02,119 Speaker 1: ads by saying that only five percent of its active 156 00:08:02,160 --> 00:08:05,000 Speaker 1: users or bots, and really it's fifty and Twitter has 157 00:08:05,040 --> 00:08:06,920 Speaker 1: known that for years and has been lying about it 158 00:08:06,960 --> 00:08:10,320 Speaker 1: to perpetrate a massive fraud. I think if like proof 159 00:08:10,320 --> 00:08:13,480 Speaker 1: of that came out tomorrow, then probably Twitter would lose 160 00:08:13,520 --> 00:08:15,280 Speaker 1: a lot of business, and so it would like lose 161 00:08:15,320 --> 00:08:17,080 Speaker 1: a lot of income and probably would getten a lot 162 00:08:17,120 --> 00:08:19,320 Speaker 1: of trouble, which would also potentially be an m A. 163 00:08:19,840 --> 00:08:22,240 Speaker 1: But when I say, there's no evidence of that, like, 164 00:08:22,280 --> 00:08:25,240 Speaker 1: it's just it's like no one ever thought it until 165 00:08:25,280 --> 00:08:28,120 Speaker 1: Ian must started pretending to think it. You know, there's 166 00:08:28,160 --> 00:08:30,160 Speaker 1: not no evidence like that. It's just not in the 167 00:08:30,200 --> 00:08:33,360 Speaker 1: realm of possibility. So that's probably not gonna work. The 168 00:08:33,440 --> 00:08:35,160 Speaker 1: other thing that he's doing is he's arguing that Twitter 169 00:08:35,200 --> 00:08:37,680 Speaker 1: has breached some of its covenants. It is like, promised 170 00:08:37,679 --> 00:08:39,480 Speaker 1: to do things between the signing of the merger and 171 00:08:39,480 --> 00:08:42,160 Speaker 1: the closing of the merger, and then it hasn't done them. Um. 172 00:08:42,160 --> 00:08:43,960 Speaker 1: And the main one is that he's arguing that it 173 00:08:44,000 --> 00:08:47,199 Speaker 1: hasn't given him all the information he wants about the bots, 174 00:08:47,440 --> 00:08:50,560 Speaker 1: which is a slightly lower standard to get out of 175 00:08:50,559 --> 00:08:53,280 Speaker 1: the deal for not providing the information. But it's still 176 00:08:53,520 --> 00:08:57,720 Speaker 1: still feels hard to imagine it all work. The box 177 00:08:57,760 --> 00:08:59,440 Speaker 1: thing is funny, and you wrote this in one of 178 00:08:59,480 --> 00:09:02,920 Speaker 1: your call Okay, who knows exactly how many bots there 179 00:09:02,960 --> 00:09:05,400 Speaker 1: are at Twitter? There's probably a lot, and you know, 180 00:09:05,480 --> 00:09:08,120 Speaker 1: he must himself probably every one of his replies gets 181 00:09:08,120 --> 00:09:10,560 Speaker 1: a thousand bots, which is why it maybe top of 182 00:09:10,640 --> 00:09:12,719 Speaker 1: mind for him. But it's hard to see it like 183 00:09:12,760 --> 00:09:16,600 Speaker 1: being material in part because, like, okay, advertisers by ads, 184 00:09:16,760 --> 00:09:20,600 Speaker 1: and then they can see very directly, I think, how 185 00:09:20,679 --> 00:09:23,199 Speaker 1: many you know, for every thousand dollars of ad spend, 186 00:09:23,240 --> 00:09:25,840 Speaker 1: how much they get in revenue, and so in theory, 187 00:09:26,000 --> 00:09:28,360 Speaker 1: like it's hard to see how that would be a 188 00:09:28,400 --> 00:09:30,520 Speaker 1: major even if by some measure, there are way more 189 00:09:30,559 --> 00:09:35,040 Speaker 1: bots on Twitter than its previously acknowledged. You still there 190 00:09:35,080 --> 00:09:37,040 Speaker 1: is that r o I. It's like either you're getting 191 00:09:37,080 --> 00:09:39,880 Speaker 1: revenue from the ads or not. And it's hard to 192 00:09:39,920 --> 00:09:42,360 Speaker 1: see how like even if there was a way off 193 00:09:42,400 --> 00:09:44,200 Speaker 1: on the bots number, how that would like really be 194 00:09:44,320 --> 00:09:47,360 Speaker 1: changing the business much at this point. Yeah, basically the 195 00:09:47,400 --> 00:09:49,800 Speaker 1: earthier I don't I don't know, Like I think like that, 196 00:09:50,000 --> 00:09:51,400 Speaker 1: you know, to the extent there's some amount of like 197 00:09:51,440 --> 00:09:53,600 Speaker 1: brand advertising on Twitter where like you're sort of not 198 00:09:53,640 --> 00:09:56,400 Speaker 1: getting a direct like clicker eye than then. But but no, 199 00:09:56,520 --> 00:09:58,480 Speaker 1: I agree with you, like, like the whole thing is absurd, 200 00:09:58,520 --> 00:10:01,240 Speaker 1: Like there's no like it's just a fantasy that Ellen 201 00:10:01,280 --> 00:10:03,079 Speaker 1: has concocted to try to get out of the deal. 202 00:10:03,240 --> 00:10:21,719 Speaker 1: There's nothing, there's no real argument there. Can you talk 203 00:10:21,760 --> 00:10:24,520 Speaker 1: to us a bit about the Twitter lawsuit because like 204 00:10:24,640 --> 00:10:28,320 Speaker 1: a it's funny and it references a bunch of Musk tweets, 205 00:10:28,360 --> 00:10:31,880 Speaker 1: but be like, my understanding is that there's a specific 206 00:10:31,920 --> 00:10:36,240 Speaker 1: performance clause which gives Twitter the right to sue Musk 207 00:10:36,400 --> 00:10:38,880 Speaker 1: to complete the deal as long as he has the 208 00:10:38,960 --> 00:10:42,040 Speaker 1: debt financing. So talked to us about like what's possible 209 00:10:42,120 --> 00:10:45,760 Speaker 1: under that, and could Musk like just try to scare 210 00:10:45,960 --> 00:10:48,920 Speaker 1: away the banks or something at this point, like would 211 00:10:48,960 --> 00:10:51,040 Speaker 1: that be a viable out for him if he said, like, oh, 212 00:10:51,080 --> 00:10:53,840 Speaker 1: actually I don't have the debt financing lined up. The 213 00:10:53,880 --> 00:10:58,079 Speaker 1: agreement says that if Twitter sues Musk for damages for 214 00:10:58,120 --> 00:11:00,679 Speaker 1: preaching the agreement, they can only get a billion dollars, 215 00:11:00,840 --> 00:11:03,040 Speaker 1: which is also the breakup fee that he agreed to 216 00:11:03,040 --> 00:11:05,679 Speaker 1: pay if he walks away. So that's just not very 217 00:11:05,760 --> 00:11:10,040 Speaker 1: much money, you know, in the context of a billion. Yeah, 218 00:11:10,040 --> 00:11:11,760 Speaker 1: like it's a forty four billion dollar deal, and like 219 00:11:11,800 --> 00:11:13,960 Speaker 1: I think if he walks away, like, you know, no 220 00:11:14,000 --> 00:11:15,760 Speaker 1: one really knows, but the stock probably, you know, the 221 00:11:15,840 --> 00:11:18,480 Speaker 1: company probably is worth you know, twenty billion ish, and 222 00:11:18,559 --> 00:11:21,360 Speaker 1: so you're talking about like twenty plus billion dollars of damages. 223 00:11:21,600 --> 00:11:24,000 Speaker 1: So the billion dollars of damages is just it's just 224 00:11:24,080 --> 00:11:26,800 Speaker 1: not really compensation with Twitter. But as you say, the 225 00:11:26,840 --> 00:11:29,959 Speaker 1: agreement says they can get specific performance. They can force 226 00:11:30,040 --> 00:11:33,400 Speaker 1: Musk to close the deal. And there is some recent 227 00:11:33,480 --> 00:11:36,680 Speaker 1: history of Delaware courts saying okay, you have to close 228 00:11:36,720 --> 00:11:40,960 Speaker 1: the deal and forcing unwilling buyers to close mergers because 229 00:11:40,960 --> 00:11:42,800 Speaker 1: they have no excuse for getting out of them. So 230 00:11:42,880 --> 00:11:45,600 Speaker 1: that's very much a live possibility. Now, as you say, 231 00:11:46,040 --> 00:11:48,160 Speaker 1: there are some conditions that you know, one is that 232 00:11:48,200 --> 00:11:51,200 Speaker 1: like Twitter can't have violated its agreements, right, so maybe 233 00:11:51,280 --> 00:11:53,280 Speaker 1: Must can wiggle out of this by saying it didn't 234 00:11:53,280 --> 00:11:55,640 Speaker 1: give him enough information about the box. But the other 235 00:11:55,679 --> 00:11:57,960 Speaker 1: one is that even if Twitter has done nothing wrong, 236 00:11:58,320 --> 00:12:01,439 Speaker 1: Musk only has to close the deal if the debt 237 00:12:01,480 --> 00:12:04,320 Speaker 1: financing is in place. So he has a thirteen billion 238 00:12:04,360 --> 00:12:07,000 Speaker 1: dollar commitment letter from his banks saying that they will 239 00:12:07,040 --> 00:12:10,360 Speaker 1: fund you know, thirteen billion dollars of Twitter debt to 240 00:12:10,360 --> 00:12:13,400 Speaker 1: close the deal, and if the banks disappear then then 241 00:12:13,440 --> 00:12:16,439 Speaker 1: he doesn't have to close. Can he blow that up? 242 00:12:16,480 --> 00:12:19,400 Speaker 1: I mean I think that like, it's not it's committed financing, 243 00:12:19,480 --> 00:12:23,880 Speaker 1: Like they have contractual obligations to him to fund. They 244 00:12:23,920 --> 00:12:27,760 Speaker 1: don't have contractual obligations to Twitter. But there is precedent 245 00:12:28,240 --> 00:12:33,520 Speaker 1: in Delaware for buyers, you know, having the same thought 246 00:12:33,559 --> 00:12:35,160 Speaker 1: process and saying I'm gonna blow up my debts so 247 00:12:35,200 --> 00:12:37,760 Speaker 1: I don't have to close the deal and blowing up 248 00:12:37,800 --> 00:12:40,199 Speaker 1: their debt and the court saying the court of chancery, 249 00:12:40,200 --> 00:12:42,560 Speaker 1: which is you know, a court of equity saying no, no, no, 250 00:12:43,280 --> 00:12:45,920 Speaker 1: if you're blowing up your dat you know, intentionally, then 251 00:12:46,280 --> 00:12:47,679 Speaker 1: we're not going to give you credit for that. We're 252 00:12:47,679 --> 00:12:50,160 Speaker 1: gonna make you close even though your debt financing isn't 253 00:12:50,160 --> 00:12:52,800 Speaker 1: in place. So deals with like the same language as 254 00:12:53,160 --> 00:12:56,360 Speaker 1: as as what Mask has here, the court said, you 255 00:12:56,400 --> 00:12:58,760 Speaker 1: know you're blowing up your debt doesn't doesn't work well. 256 00:12:58,800 --> 00:13:00,520 Speaker 1: The other thing I'd say is like, you know, we're 257 00:13:00,600 --> 00:13:04,040 Speaker 1: kind of early, honestly, like he has said he's terminating 258 00:13:04,040 --> 00:13:06,920 Speaker 1: the deal, but like, you know, they haven't even had 259 00:13:06,920 --> 00:13:09,200 Speaker 1: a share older vote, Like there's there's a lot like 260 00:13:09,240 --> 00:13:11,440 Speaker 1: the debt financing was kind of early in in like 261 00:13:11,640 --> 00:13:13,280 Speaker 1: getting done. It wasn't like they were like going out 262 00:13:13,280 --> 00:13:15,960 Speaker 1: to market the debt. So one thing that Twitter is 263 00:13:15,960 --> 00:13:18,640 Speaker 1: looking for here when they sue is they want to 264 00:13:18,760 --> 00:13:21,920 Speaker 1: judge too, Like they can't have him. They can't order 265 00:13:22,040 --> 00:13:23,640 Speaker 1: Musk to close the deal because it's just like they 266 00:13:23,679 --> 00:13:25,160 Speaker 1: haven't had a share old vote yet. You know, it's 267 00:13:25,160 --> 00:13:27,079 Speaker 1: not it's not ready to close yet. But what they 268 00:13:27,080 --> 00:13:30,240 Speaker 1: can do is order Musk to try to get the 269 00:13:30,240 --> 00:13:32,840 Speaker 1: debt financing. And if a judge says you have to 270 00:13:32,880 --> 00:13:35,040 Speaker 1: cooperate with getting the debt financing, and if you don't, 271 00:13:35,120 --> 00:13:39,000 Speaker 1: you'll be in contempt. Then it's somewhat harder for Elon, 272 00:13:39,120 --> 00:13:41,440 Speaker 1: for even Elon Musk to blow up the debt financing. 273 00:13:41,600 --> 00:13:44,480 Speaker 1: But also it's really hard for the banks to let him, 274 00:13:44,640 --> 00:13:47,439 Speaker 1: Like if you're Morgan Stanley and it was like Elon's 275 00:13:47,480 --> 00:13:49,760 Speaker 1: lead bank and a court says Elon, you have to 276 00:13:49,760 --> 00:13:53,160 Speaker 1: cooperate with the financing. You don't want to go to 277 00:13:53,240 --> 00:13:56,920 Speaker 1: court to be like, oh no, independently, we couldn't get 278 00:13:56,960 --> 00:13:59,439 Speaker 1: this financing done. Also, I mean to be clear, like 279 00:13:59,480 --> 00:14:02,280 Speaker 1: their finance thing, it's committed financing, like this is not 280 00:14:02,280 --> 00:14:03,480 Speaker 1: not like a letter of being like that we'll do 281 00:14:03,559 --> 00:14:05,640 Speaker 1: our best right like they've they've committed to fund a 282 00:14:05,679 --> 00:14:08,080 Speaker 1: thirteen billion dollar financing, like there are conditions to it, 283 00:14:08,120 --> 00:14:10,760 Speaker 1: but they're fairly minor, and like for the bank to 284 00:14:10,800 --> 00:14:13,280 Speaker 1: walk away is going to be challenging. So just on 285 00:14:13,320 --> 00:14:17,160 Speaker 1: this topic of like forcing the deal to go through, 286 00:14:17,640 --> 00:14:21,640 Speaker 1: So I mean, part of me thinks, obviously you shouldn't 287 00:14:21,680 --> 00:14:24,120 Speaker 1: be able to frivolously say that you are going to 288 00:14:24,160 --> 00:14:26,640 Speaker 1: buy a company and then just like walk away from 289 00:14:26,680 --> 00:14:29,880 Speaker 1: it and not go through with it. For not exactly 290 00:14:29,920 --> 00:14:32,400 Speaker 1: great reasons. It's not good for markets and it's not 291 00:14:32,440 --> 00:14:35,520 Speaker 1: good for society, so there should obviously be some punishment 292 00:14:35,560 --> 00:14:38,960 Speaker 1: for that. But part of me is also like, is 293 00:14:39,000 --> 00:14:43,080 Speaker 1: it weird to force people to do deals? Like what 294 00:14:43,320 --> 00:14:46,840 Speaker 1: is the benefit of that forcing a company into the 295 00:14:46,920 --> 00:14:52,080 Speaker 1: hands of an unwilling buyer? Like that also seems questionable, 296 00:14:52,720 --> 00:14:54,360 Speaker 1: certainly when it comes to Twitter, which a lot of 297 00:14:54,360 --> 00:14:58,840 Speaker 1: people would argue is like a platform for societal discourse, 298 00:14:58,960 --> 00:15:00,680 Speaker 1: is a nice way of putting it, Like, how should 299 00:15:00,720 --> 00:15:04,760 Speaker 1: we think about those two things? Yeah, it's really weird, 300 00:15:04,800 --> 00:15:06,520 Speaker 1: so so look so like if you look back at 301 00:15:06,640 --> 00:15:09,880 Speaker 1: the cases where this has happened occasionally, like there's a 302 00:15:09,920 --> 00:15:12,720 Speaker 1: public company trying to buy another public company and there'll 303 00:15:12,720 --> 00:15:16,320 Speaker 1: be an argument on specific performance, and the court will say, 304 00:15:16,760 --> 00:15:18,920 Speaker 1: we'll sort of think about questions like how hard will 305 00:15:18,960 --> 00:15:20,920 Speaker 1: it be to integrate these companies, which is like a 306 00:15:20,920 --> 00:15:22,560 Speaker 1: weird thing for the court to think about, right, But 307 00:15:22,600 --> 00:15:25,960 Speaker 1: if you're an unwilling public company buyer, you know, being 308 00:15:25,960 --> 00:15:29,320 Speaker 1: forced to buy another company, you might care like will 309 00:15:29,360 --> 00:15:32,480 Speaker 1: that be a disaster for the business? Right, But most 310 00:15:32,480 --> 00:15:36,560 Speaker 1: of these cases are private equity firms, and there there's 311 00:15:36,640 --> 00:15:40,640 Speaker 1: kind of like there's no integration. You know, there was 312 00:15:40,680 --> 00:15:43,040 Speaker 1: a shareholder of a company, and now there's gonna be 313 00:15:43,040 --> 00:15:45,760 Speaker 1: another shareholder of the company, and the shareholder will get 314 00:15:45,760 --> 00:15:48,640 Speaker 1: the money from the company, but like nothing else needs 315 00:15:48,680 --> 00:15:51,680 Speaker 1: to change. And so in some ways, it's actually like 316 00:15:51,720 --> 00:15:53,920 Speaker 1: fairly easy to order a private equity firm to buy 317 00:15:53,920 --> 00:15:55,960 Speaker 1: a company that doesn't want because it's just like an 318 00:15:55,960 --> 00:15:58,520 Speaker 1: economic transaction, right, the private equity firm is going to 319 00:15:58,560 --> 00:16:01,320 Speaker 1: try to maximize value it, you know, wished it would 320 00:16:01,320 --> 00:16:03,480 Speaker 1: have paid a lower price. It's like still weird. It's 321 00:16:03,480 --> 00:16:05,400 Speaker 1: weird to make someone buy a company they don't want, 322 00:16:05,440 --> 00:16:07,520 Speaker 1: but like you're only making them buy it. You're only 323 00:16:07,520 --> 00:16:09,200 Speaker 1: making them put up the money and then be like 324 00:16:09,240 --> 00:16:11,400 Speaker 1: the you know, economic owner. You're not making them run 325 00:16:11,400 --> 00:16:14,640 Speaker 1: at day to day Here, it's different, right, I mean, 326 00:16:14,680 --> 00:16:16,400 Speaker 1: like he said that he was going to be the 327 00:16:16,440 --> 00:16:19,400 Speaker 1: interim CEO of Twitter when he bought Twitter, right, and 328 00:16:19,440 --> 00:16:22,960 Speaker 1: he's clearly like emotionally invested in Twitter in some weird way, 329 00:16:23,360 --> 00:16:26,920 Speaker 1: and now he's clearly emotionally invested in trashing Twitter, and 330 00:16:26,960 --> 00:16:30,080 Speaker 1: so yeah, making him run Twitter would be really bad. 331 00:16:30,280 --> 00:16:31,800 Speaker 1: I mean, I don't know, maybe would be great, but 332 00:16:31,840 --> 00:16:34,840 Speaker 1: it seems like it would be really bad for like Twitter, right, 333 00:16:34,880 --> 00:16:37,000 Speaker 1: for Twitter as a platform and as a public utility, 334 00:16:37,200 --> 00:16:39,320 Speaker 1: and certainly for the employees. And it seems like it 335 00:16:39,320 --> 00:16:41,360 Speaker 1: would probably be bad for him like personally, right, Like 336 00:16:41,400 --> 00:16:43,640 Speaker 1: he's a human being who would now be in charge 337 00:16:43,640 --> 00:16:45,720 Speaker 1: of like running this company that he claims to not 338 00:16:45,760 --> 00:16:47,720 Speaker 1: want to run it, Right, Your punishment for backing out 339 00:16:47,720 --> 00:16:51,400 Speaker 1: of the deal is that now you have to run Twitter, yeah, right, 340 00:16:51,480 --> 00:16:54,720 Speaker 1: which like is a terrible punishment, but um, so yes, 341 00:16:54,760 --> 00:16:56,600 Speaker 1: I agree. It's it's weird and it's in some way 342 00:16:56,680 --> 00:16:59,240 Speaker 1: unprecedented because like the precedents are about like sort of 343 00:16:59,240 --> 00:17:02,360 Speaker 1: more like rash economic actors, and this is like a 344 00:17:02,440 --> 00:17:05,480 Speaker 1: deal about like you know, an angry man buying a 345 00:17:05,520 --> 00:17:07,840 Speaker 1: social media company. If I were in charge, like let's 346 00:17:07,840 --> 00:17:10,440 Speaker 1: say if I were the Delaware judge, and I said, 347 00:17:11,359 --> 00:17:12,880 Speaker 1: he has no excuse for getting out of the deal, 348 00:17:12,880 --> 00:17:14,439 Speaker 1: which is what I think now, Like we'll see what 349 00:17:14,520 --> 00:17:16,320 Speaker 1: his filing say, but like, as of right now, it 350 00:17:16,359 --> 00:17:17,720 Speaker 1: looks like it looks to me like he has no 351 00:17:17,760 --> 00:17:20,000 Speaker 1: excuse for getting out of the deal. If I were 352 00:17:20,000 --> 00:17:22,240 Speaker 1: the Delaware chanceller, I would say, look, I would like 353 00:17:22,320 --> 00:17:24,359 Speaker 1: call a conference and I'd say, look, I'm going to 354 00:17:24,440 --> 00:17:27,280 Speaker 1: order a specific performance. Musk has no excuse for getting 355 00:17:27,320 --> 00:17:28,679 Speaker 1: out of the deal, and I'm going to order him 356 00:17:28,680 --> 00:17:30,800 Speaker 1: to close the deal and he doesn't want that, and 357 00:17:30,840 --> 00:17:32,800 Speaker 1: Twitter doesn't want that, and frankly, I don't want that 358 00:17:32,840 --> 00:17:36,640 Speaker 1: because I'm a Twitter user. So work something out, man, Like, 359 00:17:36,800 --> 00:17:40,800 Speaker 1: the only good outcome here is a settlement where Musk 360 00:17:40,920 --> 00:17:44,840 Speaker 1: gives Twitter enough money that they don't feel so bad 361 00:17:45,280 --> 00:17:48,639 Speaker 1: about letting the deal go away, and where he doesn't 362 00:17:48,640 --> 00:17:50,240 Speaker 1: have to pay the forty four billion dollars and run 363 00:17:50,240 --> 00:17:52,320 Speaker 1: Twitter all day. Right, So if he pays them, you know, 364 00:17:52,400 --> 00:17:54,200 Speaker 1: he writes them a big check and they all agree 365 00:17:54,240 --> 00:17:57,600 Speaker 1: to forget about it, then that seems like the best 366 00:17:57,720 --> 00:18:00,119 Speaker 1: of the bad outcomes here. And the only way he 367 00:18:00,200 --> 00:18:04,800 Speaker 1: does that is if he knows that the alternative is 368 00:18:04,840 --> 00:18:07,000 Speaker 1: like a certainty of him being forced to pay forty 369 00:18:07,000 --> 00:18:09,240 Speaker 1: four billion dollars and by Twitter. Let me ask you 370 00:18:09,280 --> 00:18:12,560 Speaker 1: a question, not about the text of the law, but 371 00:18:12,640 --> 00:18:15,520 Speaker 1: the practice of the law. Okay, so I've read a 372 00:18:15,520 --> 00:18:18,600 Speaker 1: lot of matt Levine columns. It looks like must arguments 373 00:18:18,600 --> 00:18:24,040 Speaker 1: are very bad. Twitter filed this lawsuit yesterday, uh and 374 00:18:24,200 --> 00:18:27,320 Speaker 1: everyone basically said, wow, this is they have a dead 375 00:18:27,400 --> 00:18:31,480 Speaker 1: decides with this. Do Musk's lawyers enjoy this? Do they 376 00:18:31,560 --> 00:18:33,680 Speaker 1: live for this? Is this fun for them that they're 377 00:18:33,680 --> 00:18:36,159 Speaker 1: now tasked with? Like, well, how do we find an 378 00:18:36,280 --> 00:18:39,239 Speaker 1: argument that will like maybe hold up and find some 379 00:18:39,600 --> 00:18:42,199 Speaker 1: precedent that everyone had forgotten about that's in like some 380 00:18:42,320 --> 00:18:45,240 Speaker 1: dusty old book or something like is this energizing for them? 381 00:18:45,240 --> 00:18:48,119 Speaker 1: Would you? Would you find it enjoyable having been a 382 00:18:48,200 --> 00:18:52,160 Speaker 1: lawyer yourself? Would you enjoy being um must legal team? 383 00:18:52,240 --> 00:18:54,520 Speaker 1: Right now? I thought you were going to ask Matt 384 00:18:54,640 --> 00:18:57,680 Speaker 1: like what would be his strategy if he rejoined? Maybe 385 00:18:57,760 --> 00:19:00,399 Speaker 1: tell Lipton to like defend Twitter? But you've got the 386 00:19:00,520 --> 00:19:03,520 Speaker 1: other way and you've asked him Like how sheems like 387 00:19:03,560 --> 00:19:06,280 Speaker 1: defending Twitter is easy? Like everyone agrees the laws full 388 00:19:06,400 --> 00:19:08,600 Speaker 1: on the side, Like it doesn't actually seem that, like 389 00:19:08,840 --> 00:19:11,040 Speaker 1: the Twitter lawyers have a tough case to make. We'll 390 00:19:11,080 --> 00:19:13,280 Speaker 1: see what happens. But it doesn't seem like this is 391 00:19:13,280 --> 00:19:16,720 Speaker 1: a particularly everyone's saying. It's like there's kind of a 392 00:19:16,800 --> 00:19:19,320 Speaker 1: kind of a tappen for a putch, So like would 393 00:19:19,320 --> 00:19:21,520 Speaker 1: it be fun to be on the Musque defense team 394 00:19:21,520 --> 00:19:26,760 Speaker 1: in this situation? So their best argument is that he 395 00:19:26,840 --> 00:19:29,320 Speaker 1: has not given them that Twitter has not given him 396 00:19:29,320 --> 00:19:32,920 Speaker 1: the information he's requested bots. Now, I think we all 397 00:19:32,960 --> 00:19:35,879 Speaker 1: agree that the idea that there are so many bots 398 00:19:35,920 --> 00:19:38,199 Speaker 1: that the Twitter that like Twitter is not a functioning business, 399 00:19:38,200 --> 00:19:40,320 Speaker 1: is like insane and so that's not gonna work. But 400 00:19:40,760 --> 00:19:43,480 Speaker 1: he's been asking for information about bots, and he says 401 00:19:43,560 --> 00:19:46,200 Speaker 1: they haven't given him all that he wants. Now there's 402 00:19:46,240 --> 00:19:48,919 Speaker 1: some debate about like they've given him a lot, and 403 00:19:48,960 --> 00:19:51,280 Speaker 1: like he's been asking for unreasonable things, but like, you know, 404 00:19:51,400 --> 00:19:53,600 Speaker 1: that's that's all subjective and you can sort of make 405 00:19:53,680 --> 00:19:56,320 Speaker 1: noises about how he's actually been asking for reasonable things. 406 00:19:56,600 --> 00:20:00,280 Speaker 1: And the nice thing is that, you know, the thing 407 00:20:00,280 --> 00:20:02,400 Speaker 1: about the bots that is crazy, that is like crazy 408 00:20:02,440 --> 00:20:05,600 Speaker 1: making and hypocritical, is that when Musk signed the deal, 409 00:20:05,680 --> 00:20:07,560 Speaker 1: he was like, I'm going to defeat the bots, right, 410 00:20:07,680 --> 00:20:10,200 Speaker 1: Like he's made it clear from day one that he's 411 00:20:10,240 --> 00:20:13,120 Speaker 1: aware that Twitter has bots and he's really mad about them. 412 00:20:13,440 --> 00:20:16,200 Speaker 1: And so that undermines his case that like, oh, I've 413 00:20:16,200 --> 00:20:17,679 Speaker 1: discovered there too many bots. I have to walk her 414 00:20:17,720 --> 00:20:19,879 Speaker 1: from the deal. But it actually helps his case that 415 00:20:19,920 --> 00:20:22,320 Speaker 1: he wants information about the bots, because he's like, look, 416 00:20:22,520 --> 00:20:25,000 Speaker 1: I'm going to be running Twitter. I need to know 417 00:20:25,480 --> 00:20:28,439 Speaker 1: about how to fight the spam bots, and Twitter is 418 00:20:28,440 --> 00:20:30,480 Speaker 1: not giving me any of that information, which makes me 419 00:20:30,520 --> 00:20:33,200 Speaker 1: think that they're hiding something from me, and that makes 420 00:20:33,200 --> 00:20:35,920 Speaker 1: me want to walk away from the deal. I don't 421 00:20:35,960 --> 00:20:37,760 Speaker 1: think that's a good argument, but I think it's like 422 00:20:37,920 --> 00:20:41,440 Speaker 1: an argument that you could sort of, you know, gulp 423 00:20:41,520 --> 00:20:43,840 Speaker 1: and make as a I don't know, do your question, Like, 424 00:20:43,880 --> 00:20:47,960 Speaker 1: I don't know, I've never been a litigator. I think 425 00:20:47,960 --> 00:20:50,720 Speaker 1: it is hard to I think that this feels like 426 00:20:50,760 --> 00:20:53,040 Speaker 1: a like a case where you're like, this is really 427 00:20:53,080 --> 00:20:55,679 Speaker 1: I have to say this, but it was like the 428 00:20:55,760 --> 00:20:58,199 Speaker 1: richest guy in the world literally yeah, and like you know, 429 00:20:58,240 --> 00:21:00,479 Speaker 1: they are in the poor associate it, so you're going 430 00:21:00,520 --> 00:21:02,600 Speaker 1: to get waken up, woken up at like two am 431 00:21:02,640 --> 00:21:04,960 Speaker 1: in the morning because Musk tweeted something that might be 432 00:21:05,000 --> 00:21:06,640 Speaker 1: real that would be true if they had a good 433 00:21:06,640 --> 00:21:08,960 Speaker 1: case to write. I mean, like they have a tough case, 434 00:21:09,160 --> 00:21:11,800 Speaker 1: but like, yeah, they're there. They have professional pride and 435 00:21:11,840 --> 00:21:16,040 Speaker 1: crafting arguments that are you know, colorable and not like 436 00:21:16,160 --> 00:21:19,080 Speaker 1: openly dishonest, like you know, like they can't say things 437 00:21:19,080 --> 00:21:21,240 Speaker 1: that are false. They have to be honest. But I 438 00:21:21,280 --> 00:21:24,000 Speaker 1: think that like, is there is there something you can 439 00:21:24,119 --> 00:21:26,280 Speaker 1: argue here, Yeah, I think like you can argue that 440 00:21:26,680 --> 00:21:28,680 Speaker 1: they have asked for information and they haven't gotten it, 441 00:21:28,720 --> 00:21:30,399 Speaker 1: and they deserve to have that information. I don't think 442 00:21:30,400 --> 00:21:32,840 Speaker 1: that's a crazy argument to make. And I think, you know, 443 00:21:32,880 --> 00:21:35,400 Speaker 1: we'll see what happens with the dead financing. That that's 444 00:21:35,440 --> 00:21:38,399 Speaker 1: like that's like a possible avenue for getting out of 445 00:21:38,400 --> 00:21:40,919 Speaker 1: specific performance. I also think that, like, you know, like 446 00:21:41,000 --> 00:21:42,600 Speaker 1: the other thing that the other argument I would make 447 00:21:42,680 --> 00:21:45,520 Speaker 1: probably a fire musclers, is like, look, specific performances, as 448 00:21:45,520 --> 00:21:47,800 Speaker 1: they say, an equitable remedy, right, Like, you can't just 449 00:21:47,840 --> 00:21:51,000 Speaker 1: automatically get specific performance. Even if you think Musk is 450 00:21:51,040 --> 00:21:53,639 Speaker 1: like in the wrong here and Twitter is in the 451 00:21:53,720 --> 00:21:57,400 Speaker 1: right about everything, you still shouldn't order specific performance because 452 00:21:57,800 --> 00:22:00,520 Speaker 1: just like Tracy said, like like no one wants him 453 00:22:00,560 --> 00:22:02,880 Speaker 1: to own Twitter, right, like like that's that's the sort 454 00:22:02,880 --> 00:22:05,840 Speaker 1: of like weird fact here that his novel, which is 455 00:22:05,880 --> 00:22:10,800 Speaker 1: that it would be really mean to Musk, to Twitter's users, 456 00:22:10,880 --> 00:22:13,719 Speaker 1: to Twitter's employees to make him actually own the company. 457 00:22:13,760 --> 00:22:16,080 Speaker 1: And so like that could be an argument you could 458 00:22:16,080 --> 00:22:35,080 Speaker 1: make to try to get out of that consequence. Okay, 459 00:22:35,119 --> 00:22:38,239 Speaker 1: just on the topic of Musk and his tweets like 460 00:22:38,359 --> 00:22:40,560 Speaker 1: this is one of the things that made the Twitter 461 00:22:40,680 --> 00:22:44,440 Speaker 1: lawsuit quite entertaining. They embedded a bunch of Musk's own tweets, 462 00:22:44,480 --> 00:22:47,800 Speaker 1: including like ones with a poop emoji in them and 463 00:22:47,880 --> 00:22:51,880 Speaker 1: things like that, how much does what Musk himself has 464 00:22:51,920 --> 00:22:55,359 Speaker 1: said about the deal and his motivations? And you know, 465 00:22:55,440 --> 00:22:57,919 Speaker 1: he had like one meme where he sort of seemed 466 00:22:57,960 --> 00:23:00,800 Speaker 1: to imply that this whole thing was just a way 467 00:23:00,840 --> 00:23:04,359 Speaker 1: to get Twitter to have to disclose more information about 468 00:23:04,400 --> 00:23:07,480 Speaker 1: the thoughts in court, Like how much does that play 469 00:23:07,520 --> 00:23:11,120 Speaker 1: into this? I think the main way, like a judge 470 00:23:11,160 --> 00:23:12,800 Speaker 1: is ultimately going to have to sit down and say 471 00:23:13,280 --> 00:23:17,000 Speaker 1: is it fair to order a specific performance like what's 472 00:23:17,040 --> 00:23:19,760 Speaker 1: like the legal the lawyers would say the balance of 473 00:23:19,800 --> 00:23:23,040 Speaker 1: the equities, like, even if Musk is preaching the agreement, 474 00:23:23,080 --> 00:23:24,640 Speaker 1: is it really a good ide to force him to close? 475 00:23:24,680 --> 00:23:30,480 Speaker 1: And I think that Twitter strategy here is to say, look, 476 00:23:30,520 --> 00:23:35,160 Speaker 1: the angrier the judges at elon Musk, the more likely 477 00:23:35,240 --> 00:23:38,960 Speaker 1: the judges to order him to close the deal. And 478 00:23:39,680 --> 00:23:44,119 Speaker 1: his really just like public thumbing his nose at the 479 00:23:44,160 --> 00:23:47,560 Speaker 1: sanctity of merger agreements is going to annoy a Delaware judge, 480 00:23:47,640 --> 00:23:50,080 Speaker 1: right because like the Delaware judge is in the business 481 00:23:50,119 --> 00:23:54,280 Speaker 1: of making Delaware a predictable place to do business and 482 00:23:54,480 --> 00:23:58,360 Speaker 1: a place where merger agreements are predictably enforced. And when 483 00:23:58,359 --> 00:24:00,480 Speaker 1: a guy was like I don't care about merger agreements, 484 00:24:00,480 --> 00:24:02,240 Speaker 1: like that's going to annoy it Delaware judge, and like 485 00:24:02,280 --> 00:24:04,800 Speaker 1: showing the tweets is gonna kind of drive that home. 486 00:24:04,840 --> 00:24:07,600 Speaker 1: I hadn't thought about that angle, which is that if 487 00:24:07,920 --> 00:24:10,960 Speaker 1: you know, if if that there is a sort of 488 00:24:11,040 --> 00:24:15,440 Speaker 1: Delaware consequence if they go too far outside of norms, 489 00:24:15,640 --> 00:24:19,080 Speaker 1: which sort of undermines the entire point of having all 490 00:24:19,160 --> 00:24:21,480 Speaker 1: this like corporal law done in their courts. But I 491 00:24:21,520 --> 00:24:25,520 Speaker 1: just have like, actually have two very short questions related 492 00:24:25,560 --> 00:24:27,920 Speaker 1: to the Delaware courts. I think I saw maybe it 493 00:24:28,000 --> 00:24:30,360 Speaker 1: said it was in the Twitter lawsuit that they think 494 00:24:30,400 --> 00:24:32,520 Speaker 1: it can be a four day trial, Like can do 495 00:24:32,600 --> 00:24:38,000 Speaker 1: Delaware courts? Can they really move that fast? Yeah? In general, 496 00:24:38,080 --> 00:24:41,439 Speaker 1: Delaware courts are in the business of doing trials on 497 00:24:41,520 --> 00:24:44,720 Speaker 1: merger cases, like in order to close murders quickly, Like 498 00:24:44,800 --> 00:24:47,399 Speaker 1: this isn't probably a case for damages, right, this isn't like, 499 00:24:47,560 --> 00:24:49,080 Speaker 1: you know, we drag this out for five years and 500 00:24:49,119 --> 00:24:51,240 Speaker 1: do a lot of discovery, right, everyone knows all the facts. 501 00:24:51,280 --> 00:24:53,359 Speaker 1: First of all, right, like the facts are fairly straightforward. 502 00:24:53,560 --> 00:24:56,000 Speaker 1: And secondly, like, you know, the thing they're looking for 503 00:24:56,200 --> 00:24:57,680 Speaker 1: is like you got to close the deal, right, So 504 00:24:57,720 --> 00:25:00,199 Speaker 1: like they're not gonna wait five years to is the 505 00:25:00,240 --> 00:25:02,760 Speaker 1: deal right? Like like Della records move fast in like 506 00:25:02,840 --> 00:25:06,400 Speaker 1: merger disputes and like and again like you know, Delaware 507 00:25:06,400 --> 00:25:08,000 Speaker 1: is in the business of doing this right, Like it's 508 00:25:08,080 --> 00:25:12,080 Speaker 1: very important to Delaware that mergers be predictable and they 509 00:25:12,080 --> 00:25:13,800 Speaker 1: close on time. And so when someone's trying not to 510 00:25:13,800 --> 00:25:15,639 Speaker 1: close a merger and someone else is trying to get 511 00:25:15,680 --> 00:25:17,720 Speaker 1: it closed, they're like, Okay, we'll do a quick trial 512 00:25:17,720 --> 00:25:19,960 Speaker 1: and and we'll give you an answer. You know. It's 513 00:25:19,960 --> 00:25:22,120 Speaker 1: it's it's like that that's the business that right, that's 514 00:25:22,160 --> 00:25:24,679 Speaker 1: the that's the that's the whole point of Delaware. So 515 00:25:24,880 --> 00:25:27,359 Speaker 1: last question is uh, and I think you wrote about 516 00:25:27,359 --> 00:25:30,360 Speaker 1: this like is there a world in which there could 517 00:25:30,400 --> 00:25:32,400 Speaker 1: be criminal Like let's say it's like, yeah, you've got 518 00:25:32,400 --> 00:25:35,040 Speaker 1: to close this deal. There's no you know, no question 519 00:25:35,440 --> 00:25:38,119 Speaker 1: and must like still doesn't want to in the world 520 00:25:38,160 --> 00:25:40,960 Speaker 1: of like infinite possibilities, is there a world in which 521 00:25:41,000 --> 00:25:45,600 Speaker 1: that could lead to his arrest and imprisonment. I've joked 522 00:25:45,640 --> 00:25:49,760 Speaker 1: about tensory jail. There's there's there's one time ever when 523 00:25:49,760 --> 00:25:52,320 Speaker 1: a Delaware chancellor like ordered someone arrested, but it was 524 00:25:52,359 --> 00:25:56,240 Speaker 1: not over a merger. I mean, I don't know, fanciful 525 00:25:56,359 --> 00:25:58,920 Speaker 1: like this it weird. You know, the world is weird 526 00:25:59,480 --> 00:26:03,200 Speaker 1: because it's Elon Musk. Because he likes so blatantly thumbs 527 00:26:03,200 --> 00:26:05,960 Speaker 1: his nose at authority. People did sort of immediately jump 528 00:26:05,960 --> 00:26:07,760 Speaker 1: to the question of, like what happens if it judge 529 00:26:07,760 --> 00:26:10,520 Speaker 1: says okay, you have to close this deal and must 530 00:26:10,560 --> 00:26:13,600 Speaker 1: says no. What does the court do? Do they order 531 00:26:13,680 --> 00:26:15,879 Speaker 1: him arrested? You know, I don't know the answer. I 532 00:26:15,920 --> 00:26:18,119 Speaker 1: mean I think, like, I think the court holds him 533 00:26:18,160 --> 00:26:20,840 Speaker 1: in contempt. I think if he stays in Texas, I 534 00:26:20,880 --> 00:26:23,000 Speaker 1: think I don't I'm here, I'm speculating. I don't think that, 535 00:26:23,040 --> 00:26:25,600 Speaker 1: like the first order of business is for like a 536 00:26:25,640 --> 00:26:28,720 Speaker 1: Delaware chancellor to try to get him extradited to Delaware 537 00:26:28,920 --> 00:26:30,919 Speaker 1: to go to a Delaware jail. I think there are 538 00:26:30,960 --> 00:26:34,239 Speaker 1: other things you can do. Weird things happen. I think 539 00:26:34,280 --> 00:26:35,760 Speaker 1: there are other things you could do. Is a Delaware 540 00:26:35,800 --> 00:26:38,760 Speaker 1: tesselor like for instance, can you try to see some assets? Well, 541 00:26:38,800 --> 00:26:41,760 Speaker 1: I don't know, but like you know, one question is like, 542 00:26:41,960 --> 00:26:44,359 Speaker 1: does he have any assets in Delaware? I doubt he 543 00:26:44,400 --> 00:26:46,359 Speaker 1: has like a big mansion in Delaware, but you know 544 00:26:46,400 --> 00:26:49,000 Speaker 1: what he has in Delaware? Maybe hundreds of billions of 545 00:26:49,000 --> 00:26:51,760 Speaker 1: dollars of Tesla Stock, which is a Delaware corporation. So 546 00:26:51,840 --> 00:26:53,760 Speaker 1: can they seize that? I don't know, man, But like 547 00:26:53,920 --> 00:26:56,600 Speaker 1: I think that if they order him to close and 548 00:26:56,680 --> 00:27:00,600 Speaker 1: he just ignores the court, I don't really know what 549 00:27:00,720 --> 00:27:03,159 Speaker 1: levers they have to make him do it, but I 550 00:27:03,200 --> 00:27:05,639 Speaker 1: think they probably have some. I think that putting him 551 00:27:05,640 --> 00:27:07,960 Speaker 1: in a jail in Delaware it's probably pretty low down 552 00:27:07,960 --> 00:27:11,280 Speaker 1: on the list, But I don't know. Alright, Matt, Well, 553 00:27:11,359 --> 00:27:13,679 Speaker 1: we could go on about this for hours, obviously, and 554 00:27:13,720 --> 00:27:17,120 Speaker 1: we probably will, unfortunately, have a chance to talk about 555 00:27:17,119 --> 00:27:19,439 Speaker 1: it again at a later date. But thank you so 556 00:27:19,560 --> 00:27:22,800 Speaker 1: much for coming on odd thoughts and explaining just how 557 00:27:22,880 --> 00:27:26,479 Speaker 1: surreal everything is at the moment. It's pretty weird. And 558 00:27:26,760 --> 00:27:29,879 Speaker 1: looking forward to reading all of your many do you 559 00:27:29,920 --> 00:27:31,480 Speaker 1: do you dream about it? Has he been in your 560 00:27:31,560 --> 00:27:36,320 Speaker 1: dreams yet? Because you're like the third character of this story, 561 00:27:34,359 --> 00:27:39,679 Speaker 1: it's like dreams, it's more than like I am like 562 00:27:39,760 --> 00:27:43,120 Speaker 1: missing sleep to like set up my computer and type. 563 00:27:43,160 --> 00:27:45,200 Speaker 1: I don't think I've actually agreamed about it the world. 564 00:27:45,280 --> 00:27:48,800 Speaker 1: The world appreciate your your service man, and we appreciate 565 00:27:48,840 --> 00:28:02,159 Speaker 1: you coming on the show. That's right. So clearly a 566 00:28:02,160 --> 00:28:04,280 Speaker 1: lot of weirdness there and a lot of open ended 567 00:28:04,359 --> 00:28:08,080 Speaker 1: questions about what might happen. But I feel like, I 568 00:28:08,119 --> 00:28:11,520 Speaker 1: don't know, like a I just feel like there's a 569 00:28:11,520 --> 00:28:15,720 Speaker 1: lot of stupidity. But be like part of me, part 570 00:28:15,800 --> 00:28:19,040 Speaker 1: of me, really likes Musk making the point about Twitter bots, 571 00:28:19,720 --> 00:28:23,080 Speaker 1: but the other part of me thinks maybe he shouldn't 572 00:28:23,080 --> 00:28:27,200 Speaker 1: make that point by completely trashing the US legal system. 573 00:28:27,240 --> 00:28:29,080 Speaker 1: You know, I hadn't thought about that point, But I 574 00:28:29,119 --> 00:28:32,080 Speaker 1: do think that was really a good point that Matt made, 575 00:28:32,119 --> 00:28:35,280 Speaker 1: which is that, like the whole reason so much corporate 576 00:28:35,359 --> 00:28:39,800 Speaker 1: law is done in Delaware, it's like it's quick, it's predictable, 577 00:28:40,200 --> 00:28:43,120 Speaker 1: the rules are like fairly unambiguous, and you know, everyone 578 00:28:43,200 --> 00:28:46,840 Speaker 1: sort of likes that, which does make it seem like 579 00:28:46,960 --> 00:28:49,920 Speaker 1: it even raises the bar further, the fact that like 580 00:28:50,120 --> 00:28:53,080 Speaker 1: Musk seems to be thumbing his nose so much at 581 00:28:53,120 --> 00:28:57,240 Speaker 1: the contract law, like if that's allowed and endorsed by 582 00:28:57,360 --> 00:29:00,840 Speaker 1: a Delaware court. Then what the point of a Delaware 583 00:29:00,880 --> 00:29:02,720 Speaker 1: court Again? I don't know, Like maybe his lawyers are 584 00:29:02,760 --> 00:29:06,080 Speaker 1: gonna like pull something that really is like changes our story, 585 00:29:06,320 --> 00:29:09,640 Speaker 1: and lawyers are really good at doing that. But yeah, 586 00:29:09,800 --> 00:29:12,920 Speaker 1: like this sort of the whole system is implicitly on 587 00:29:12,960 --> 00:29:17,719 Speaker 1: trial almost. Yeah, And also like I just the idea 588 00:29:17,840 --> 00:29:20,800 Speaker 1: that the ultimate punishment for Elon Musk might be having 589 00:29:20,840 --> 00:29:23,320 Speaker 1: to become CEO of Twitter, And like I just have 590 00:29:23,400 --> 00:29:26,680 Speaker 1: this image of like a judge somewhere like standing behind 591 00:29:26,720 --> 00:29:29,479 Speaker 1: Elon Musk while he sits at a desk doing like 592 00:29:29,600 --> 00:29:32,480 Speaker 1: Twitter things and finding the bots and just forcing him 593 00:29:32,520 --> 00:29:37,360 Speaker 1: to do it. There's this whole thing is very strange. Uh, 594 00:29:37,760 --> 00:29:40,720 Speaker 1: lots of future Matt Levine columns to read at a 595 00:29:40,840 --> 00:29:43,040 Speaker 1: very minimum. Shall we leave it there. Let's leave it there. 596 00:29:43,280 --> 00:29:46,200 Speaker 1: This has been another episode of the All Thoughts podcast. 597 00:29:46,240 --> 00:29:48,680 Speaker 1: I'm Tracy Alloway. You can follow me on Twitter at 598 00:29:48,720 --> 00:29:51,520 Speaker 1: Tracy Alloway and I'm Joe wisn't Thal. You can follow 599 00:29:51,520 --> 00:29:54,480 Speaker 1: me on Twitter at the Stalwart. Follow our guest Matt 600 00:29:54,560 --> 00:29:57,680 Speaker 1: Levine on Twitter. He's Matt Underscore Levine, and of course, 601 00:29:58,160 --> 00:30:00,880 Speaker 1: subscribe to his newsletter Money stuff that you can not. 602 00:30:01,200 --> 00:30:03,280 Speaker 1: He is a link to it at his handle. Follow 603 00:30:03,280 --> 00:30:06,960 Speaker 1: our producer Kerman Rodriguez at Kerman Arman and check out 604 00:30:07,000 --> 00:30:10,600 Speaker 1: all of our podcasts Bloomberg under the handle at podcasts. 605 00:30:10,720 --> 00:30:11,440 Speaker 1: Thanks for listening.