[dragontamer]

> It seems like Microsoft believes they can settle for something much lower. The stock price doesn’t seem to be hurting pre-market at all

Given the Stock Markets inability to predict the Twitter buyout despite public documents stating Elon Musk's contract to buy at $54.20/share throughout 2022, I'm pretty sure that stock market investors are literally illiterate, unable to read public documents.

Anyone who bought Twitter at $35/share after the contracts public disclosure knows what I'm talking about.

---------

AMC / APE for another example. Anyone who short sold AMC and bought long APE made bank this past year (before the AMC/APE stock ticker merge there were public documents in December 2022 stating AMCs intention to merge the two one-for-one)

I believe I saw an opportunity as wide as $8 for AMC and $1.50 for a legally equivalent APE a few months ago.

Literally public documents with public court signatures and everything, but so many people remaining ignorant for months, providing anyone 'who can read' an opportunity to make tons of nearly risk free money.

[fallingknife]

There are a million reasons that those trades were not free money. e.g. it's quite expensive to short stocks like AMC. Not knowing that makes me think you weren't actually in that trade.

Start putting your money in the market and you won't be talking about easy money for "anyone who can read" for very long.

[claytongulick]

I just had another poster on HN say something similar to me - but about property investing.

Their point was something along the lines of "it doesn't take a genius to buy low and sell high".

My counter point, to which I don't believe I ever got a response, was "oh? try it then"

Markets are easy to read in hindsight. Most folks are predicting a housing market correction over the next 12 months. But, they've been doing that for the past 12 months too, and it hasn't really happened yet (very mild).

So, when to buy? The answer is that it's quite complicated, and the work is in the individual deal - it requires a lot of research, understanding neighborhoods, WFH trends, how to spot "lipstick on a pig" house flips, regulatory issues, flood zones, insurance rates, mortgage rates, warrantable vs non-warrantable loans and what properties qualify, hurricane standards, wiring, electrical service, plumbing, STR income, occupancy rates, management fees, cleaning fees and quality, long term rental income, renter risk profiles and a million other things that go into understanding whether a deal will make money.

No, it doesn't take a genius, but it does take a lot of hard work.

[aifsognionio]

>AMC / APE for another example. Anyone who short sold AMC and bought long APE made bank this past year (before the AMC/APE stock ticker merge there were public documents in December 2022 stating AMCs intention to merge the two one-for-one)

This is called "pairs trading", right? Is there any way it can blow up? Remember that this is AMC, which could be out of business in six months or could go up 3000% in another idiotic bubble.

I made a fair bit of money off Twitter because it was as simple as buying stock at the market rate. Anyone who reads the papers knew the price of Twitter to the penny and could have bought in with a phone call. The sort of trade you're talking about sounds harder to pull off safely. That's no excuse for the hedge funds, of course.

[smcl]

I don't think it's quite that simple. After the offer was submitted he famously tried hard to NOT buy Twitter. In the end his attempts to back out of the purchase because of the supposed undisclosed bot problem were thrown out in court, but iirc he could still have pulled out by paying "only" a couple billion dollars in fines or something. I guess it comes down to "do you believe Elon Musk when he says something" and plenty of people understandably didn't.

That doesn't make them "literally illiterate" though.

[dragontamer]

> but iirc he could still have pulled out by paying "only" a couple billion dollars in fines or something.

That clause was clearly for things outside of Elon (or former Twitter)'s control. Like if a government stepped in to stop the purchase.

Elon never had a good counter argument. So it was simply a case of those who were able to read the public court documents vs the ones who believed Elons out-of-court media blitz.

Alas, the only arguments that matter in court are the arguments that are filled in court. None of the discussion points you talked about even made it to the case, they were laughed out long before Elon gave up and bought Twitter.

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Reading. It's a superpower. That's what the past year has taught me. A surpring number of people cannot read and will believe falsehoods even if they contradict written and agreed upon documents.

[aifsognionio]

>iirc he could still have pulled out by paying "only" a couple billion dollars in fines or something.

He couldn't have. That clause protected Twitter, not him. It ensured Twitter would still get something in case outside forces, like government regulators or financing falling through, prevented the deal. It did not give Musk the right to pay a penalty and back out.

Twitter explicitly reserved the right to sue for specific performance, i.e. to force the deal through rather than merely getting damages. Musk explicitly signed away any rights to investigate or back out. Twitter was honest and forthright so any fraud claims were nonsense. Musk didn't have a leg to stand on, legally or factually.

The most he could have done was tie things up in court. But the courts can throw out bad-faith lawsuits pretty quickly.

https://www.nytimes.com/2022/07/11/business/dealbook/elon-mu...

The other guy you're talking to is being a dick. There was a concerted disinformation campaign from Musk and friends, and the papers were not willing enough to call "bullshit" on the front page. The truth was out there but hardly staring you in the face.

But hedge funds have teams of lawyers reading this stuff all day long. They have no excuse for not seeing through Musk's chicanery.

[kllrnohj]

> and the papers were not willing enough to call "bullshit" on the front page. The truth was out there but hardly staring you in the face.

It kinda was, though. A bunch of lawyer-reacts at the time basically were "this isn't financial advice, but lol Musk is fucked and the Delaware court doesn't screw around or delay"

[generic92034]

Do you have a link to the public documents? A short web search gave me nothing.

[dragontamer]

https://www.wlrk.com/docs/76660099_Final-Verified-Complaint....

This was my first search on Google, but there were many, many, many documents of this nature.

Is this doc sufficient? Or are you looking for something else? I'm aware of earlier docs but it gets more legalize and arcane the further back you go.

By the time the trials started, the argument from Twitter was incredibly strong and well documented. But the stock price of Twitter was still like $40 so you'd have lots of opportunity to make money on the trade (Musk promised to buy at $54.20 after all)

[generic92034]

Thanks, I did not see such a doc on the first three pages, so I am wondering if I was using bad search terms. However, looking through that document and not being a lawyer I am not feeling confident to interpret it correctly. What is a "Verified Complaint" in the first place? Are the items under "Nature of the Action" approved by the court or are they just claims of the complaining side? Also I am generally feeling not all that confident that phrases in a legal text have the same meaning I am used to.

All of that contributes to a completely different picture for me, compared to your statements. Sure, I can read documents like that (if I can find them, if I think of searching for them, ...), but I am not at all confident that my literal interpretation is sound. Thus my perceived risk of an investment would be much higher than yours.

So, maybe literacy is not the point here, but rather confidence in interpreting legal texts correctly, a good grasp of contract law and optimism/experience regarding external factors.

[dragontamer]

That's the best part of American courts.

You DO NOT need to be a lawyer to get the arguments. By the time the discussion reaches this stage, the arcane bits are stripped out and referenced explicitly.

In fact, the jury are laypeople, just average Joe's and Jane's. All arguments must be simplified to a point that average people can understand. So it's a good point to pickup info.

---------

Here's a few key events to note on this particular trial:

1. Strong opening argument from Twitter over the contract. My opinion of course, but just read the document and get a gist of the argument yourself.

2. Weak opening arguments from Musk's lawyers.

3. Repeated reprimands from the trial judge for various mistakes the Musk lawyer team were committing

4. Inconsistency between what Elon Musk was saying in public / in the media and what his lawyers were saying in the trial.

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Note that in this special case, a judge decided the case instead of a jury. But the argument style at this late stage is simplified to the point where ordinary people / a jury can understand in any case.

[generic92034]

That does not change that I cannot categorize the document you have linked, nor its parts, see my previous questions in that regard: "What is a "Verified Complaint" in the first place? Are the items under "Nature of the Action" approved by the court or are they just claims of the complaining side?"

[dragontamer]

Did you read the first paragraph?

> Plaintiff Twitter, Inc. (“Twitter”), by and through its undersigned counsel, as and for its complaint against defendants Elon R. Musk, X Holdings I, Inc. (“Parent”), and X Holdings II, Inc. (“Acquisition Sub”), alleges as follows:

If you are trying to say this is 'difficult to read', maybe don't pick things that are answered in the first paragraph.

[porb121]

yeah chief I'm gonna need you to google "stock borrow rate" and get back to me when you've made it through the investopedia page