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Originally Posted by Azure
I get that, however we don't know if Musk doesn't have legal precedent or not here. Maybe he had some sort of legal protection in the purchase agreement where he had the right to back out if something about Twitter didn't line up.
The whole purchase thing is sketchy as heck, but at the same time I think Twitter is basically a Russian bot site and has been for a long time.
In effect if you buy Twitter, you buy it for the user base, and if the user base turns out to be completely fraudulent, why shouldn't there be a clause allowing you to back out? I mean that is literally the first thing I thought of when I heard Musk wanted to buy Twitter. Whether he actually knows how many real users they have.
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But we do know what the purchase agreement says. Musk waived his due diligence. There is a specific performance clause. As you mentioned “everyone”knows there is a bot problem, including Musk. The $1B breakup fee is really the minimum he can expect to lose. That is only available in very limited, specific circumstances. He is grasping at straws with the bot issue, in my opinion. If he backs out, it would seem like a reasonable assessment of damages to shareholders would be the difference between $54.20 and where the stock ends up. $10B + is possible, I would think. Big pill even for Musk.
What is most interesting to me is what happens with the Tesla stock. A forced sale might depress the price to some extent. Much of the value is based on the genius of Musk. Does that take an additional hit?