Wednesday, April 27, 2022

Elon Is Arguably Already Violating The Section 6.8 "No Mean Tweets" Clause On Page 50.


So. . . buckle up for some federal court theater/deal-litigation, on what Musk can and cannot tweet, as the deal progresses.

I imaged the Tweet at right, since it has been screen capped, and given a boost on the hard-right social site called "gab[dot]com".

Charming, Elon. [Just how immature is he?]

My point in using that reprint is to show why the merger agreement clause on page 50, was written.

No one censored free speech, at Twitter.

That is a lie. And "Truth Social" exists because Tangerine got bounced for CONDUCT, not speech -- the conduct was exhortations in a conspiracy to commit an act of insurrection against the federal government (and his own VP) in session certifying his own election loss. He targeted the Speaker, the Majority Leader and. . . yes, his own VP.

Since lies are per se defamatory, and libelous. . . Musk has violated his only one day old merger covenants.

This stuff matters, because the price discovery in the capital markets, relies on truthful speakers at the head of public companies. Mostly it is an honor system, so one needs highly ethical officers, ones who do not need "hall monitors" to constantly remind them to. . . follow the law.

In a bit of timely irony, Mr. Musk's "hall monitor" at SEC. . . and an able USDC Judge sitting in Manhattan, reminded Elon in court today, lying about matters that affect the price of securities. . . is itself a felony.

It may well be that the SEC will now move toward a bar, keeping him away from public companies (like Tesla) for a period of time, given the events of last November, and his arguable inside selling group. Losing Tesla (even for just a year or two) would be much, much worse for him than being bounced out of the Twitter bidding, but both are on the table now -- as Twitter remains... a '34 Act company until (any) closing.

[And, as a side note, we expect ugly results tomorrow in the Q1 2022 report from Twitter. But don't lose the object lesson, here -- Musk is the clearly wrong guy to run that company.]

It is astonishing that the soon to be No. 2 (not No. 1) wealthiest person in the world needs contractual restrictions around defaming people with false tweets, on a system he wants to "improve" -- by leading it.

I N S A N E.

नमस्ते

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