Harvard Law Professor thinks it is likely that Musk will have to buy Twitter
Harvard Law Professor, Guhan Subramanian ’98, thinks that $Twitter (Delisted) (TWTR.US)$ will likely win the case (source below). This is after LegalEagle, an American lawyer and YouTuber, analysis on the Twitter v Musk case as seen in this post, which he thinks Twitter will likely win the case too.
Guhan Subramanian ’98, is the Joseph H. Flom Professor of Law and Business at Harvard Law School, and the H. Douglas Weaver Professor of Business Law at Harvard Business School.
The case
Musk have given 3 main points on why it is legal for him to back out of the deal and here are Subramanian view on it:
1. He have the right to information that he reasonably needs but Twitter is not giving him.
Which Subramanian think this point is tough for Musk to win as it does seems to him that Twitter have been providing information, and even made efforts to give Musk information about the bots.
2. The number of bots are way higher than 5%.
In this point, Musk will need to prove 2 points. Firstly, his team have to figure out the actual number of bot and it have to be way higher than 5%. Secondly, they have to prove that Twitter knows it and lied about it.
Subramanian believes that Musk and his team could not figure out how many bots there are, despite given the "firehose" API. So unless there is evidence showing that Twitter knew that the number of bots is way higher than five percent and they lied about it, Elon Musk likely loses on this claim.
3. Twitter laying off of staff is not in the realm of “ordinary course” of business.
Subramanian thinks this is the best claim among the 3 claims, but the claim isn't very strong either. This is because, according to Twitter, he approved a lot of these terminations.
Furthermore, based on 1,300 deals cases, 93% of those deals are seller friendly when it comes to “ordinary course covenant”. Thus, it is hard for routine terminations to be sufficient enough to violate the ordinary course covenant.
The case
Musk have given 3 main points on why it is legal for him to back out of the deal and here are Subramanian view on it:
1. He have the right to information that he reasonably needs but Twitter is not giving him.
Which Subramanian think this point is tough for Musk to win as it does seems to him that Twitter have been providing information, and even made efforts to give Musk information about the bots.
2. The number of bots are way higher than 5%.
In this point, Musk will need to prove 2 points. Firstly, his team have to figure out the actual number of bot and it have to be way higher than 5%. Secondly, they have to prove that Twitter knows it and lied about it.
Subramanian believes that Musk and his team could not figure out how many bots there are, despite given the "firehose" API. So unless there is evidence showing that Twitter knew that the number of bots is way higher than five percent and they lied about it, Elon Musk likely loses on this claim.
3. Twitter laying off of staff is not in the realm of “ordinary course” of business.
Subramanian thinks this is the best claim among the 3 claims, but the claim isn't very strong either. This is because, according to Twitter, he approved a lot of these terminations.
Furthermore, based on 1,300 deals cases, 93% of those deals are seller friendly when it comes to “ordinary course covenant”. Thus, it is hard for routine terminations to be sufficient enough to violate the ordinary course covenant.
Conclusion
Subramanian thinks that Musk has fairly weak arguments to back out of the deal. Thus, it is more likely that Twitter will win the case.
He also mentioned that the court may have an ability to attach his $Tesla (TSLA.US)$ shares as a means to close the deal.
However, this doesn't mean Twitter will definitely win. It is just a view of a renowned law professor. Do your own due diligence ah![]()
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Subramanian thinks that Musk has fairly weak arguments to back out of the deal. Thus, it is more likely that Twitter will win the case.
He also mentioned that the court may have an ability to attach his $Tesla (TSLA.US)$ shares as a means to close the deal.
However, this doesn't mean Twitter will definitely win. It is just a view of a renowned law professor. Do your own due diligence ah
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TeslaSmurf : The guy starts all his pamphlet with the typical statements of EVERY Elon’s HATER. And he is not Guhan Subramanian. He may have quoted that lawyer but this is clearly a non-objective opinion. People is free to believe in whatever they like but such a video, vomiting thing that has nothing to do with the cause, as Elon’s private life rather than how few model Tesla is producing (one of the reasons of Tesla’s great margins and production numbers compared to the NON-EXISTING competition in the US). You can get a VW id4 tomorrow as they have a 170 days inventory while to get a model Y you should wait for one year… and VW makes no profit on it while Tesla has about a 30% margin.
Good luck in betting against Elon.
I’m ALL-in TSLA (except a small SHORT position against Twitter).
doctorpot1 OP TeslaSmurf : The source domain is harvard.edu, posted in harvard.edu. if you think this harvard law Professor is a Elon hater by all means, believe it as everyone have their rights to their own opinion so long they dont deliberately cause harm to another. that's why I always cite the source so that everyone can do due diligence on it.
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again as stated in the piece this doesn't mean Twitter will win or Elon will win. cause no one opinion matters except for the all mighty judge
had been trying to see if there are any credible and non bias lawyer opinion on why Elon will win but haven't came across any. Still finding and will update when found
doctorpot1 OP TeslaSmurf : And it seems like you think I’m short Tesla. I dont have any position on Tesla. I dont care if Tesla is $100k a share or $5 a share.
I only care about truth, knowledge and justice on this case. Plus I have a safe bet on Twitter closing the deal which is public with the rationale for the bet. So even if Elon win, I still stand a good chance for profit, but I’m weighted more towards Twitter winning. Once the case is judged, I’m out. Not going to play the appeal or whatever nonsense later on.
TeslaSmurf doctorpot1 OP : You are right on the fact that TWTR will end higher than now (probably at 42$). What I say is that to get there, it has to fall under 30. That’s when I’ll cover my short and BUY to sell it to Elon at 42$. Just numbers.
Justice is not what whatsoever PARTISAN (like the HATER you posted) claims. IF the Twitter platform is affected by more than 10% bots Elon is clearly in his CONTRACTUAL RIGHT to walk away paying the 1Bn fee explicitly considered in the same contract.
It’s that simple…
TeslaSmurf doctorpot1 OP : The guy speaking is NOT professor Guhan Subramanian and he spends most of the time speaking against Elon’s personal life and against Tesla, which is ALL FUD. The only thing I know is that Tesla is the best company in the market (by numbers and results) and Elon is the man who took it there, starting the disruptive revolution we are assisting to. There’s people hating it and people embracing and making long time and daily money out of it, as I’m proud to do.
).
Twitter and it’s stock is just a funny game (less funny if I’m wrong, but that’s a few thousand bucks I would have paid to participate to the show
Grab your popcorn and take it easy.
End of the question.
doctorpot1 OP TeslaSmurf : which I had disagreed on the point that Twitter will go under 30 if the judge rule in favor of Twitter or they tried to settle out of court for 42.
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I did explain that once the offer is out the share price is equal to offer price minus risk premium. With either a new offer or a concrete judgement by the court. the risk premium won't be so huge.
of the offer is 42 and the share price is 30. that is a 40% risk premium. arbitrage will happen. if that is the case I will buy all shares at 30, then approve the deal, and earn 12 per share risk free.
and also people must irrational enough to say hmm I can sell my share to Musk at 42, maybe I should sell 30 instead because I love to lose money hahahhahaa
I can see WSB apes do that maybe? since their motto seems to be buy high sell low
doctorpot1 OP TeslaSmurf : the article is an interview and I only take the transcript of the law professor though, so unless the speaker is blatantly editing his word and manage to get it posted on harvard.edu, I doubt it is bais.
I support Elon for all his innovation work, where he had advanced many technologies such as EV and space race. As a tech guy myself, I'm super impressed.
But I dislike his blantant disregards for laws though, in this case and the other 420 case. he is acting like a typical spoilt rich kids who thinks he is above the law and is super outspoken about it. the other rich kids does it too. but at least they have the decency to hide it. His 2 times 420 buyout jokes cause many peasant like us to lose a lot of money. how many of his fans and innocent retail investors bought Twitter at the 50 range just because they believe Elon will buy over and change Twitter for the better?
with great power comes great responsibility