He wants to duplicate the success of the Chinese app WeChat, which in addition to messaging is a payment platform that ties into ride hailing apps, delivery apps, etc. I am not sure that it will work in the West where you already have robust options for all of that. He seems to be trying to find a place in the ecosystem wher he could squat and just rack up money from rent taking on both sides of every transaction.
X.com is I think the interesting part of this - not because there is anything good about the idea or the name - just the idea that Elon has had this url for 25 years, has never been able to do anything with it, but remains obsessed with the name. He is weirdly determined to make fetch happen, which is a terrible look, but probably accurate and revealing
Worth noting that the loss of these two potential partners won’t necessarily derail the deal. The original deal called for Musk to come up with most of the money (~ $33.5B), and for his banks to provide the rest (~ $13B). If the banks say “Nope, we’re out,” and have a contractually-valid reason for doing so, then the whole deal is (probably) off. But Apollo and Sixth Street aren’t involved with that $13B. They were lenders that Musk was talking to about possibly helping him come up with part of his $33.5B obligation. If they’re not interested – and apparently they haven’t been for a while, ever since Musk started trash-talking Twitter everywhere – then all it means is that Musk needs to come up with more of the $33.5B himself. And he’s still on the hook for the full amount. If he says “Can’t pay, won’t pay,” and the deal flops, then he’s at fault and it’s penalty time.
I thought the Twitter lawsuit was not about forcing a penalty, but forcing the sale. A court order to complete the full $44 billion transaction – up to and including the court seising and selling his assets (Tesla Stock, etc) to complete the sale. Was I mistaken about that?
You’re right that Twitter’s lawsuit was to force Musk to complete the deal on the original terms. But in the original contract there’s also a $1B termination fee which Musk has to pay if the financing fails.
If Musk walked away from the deal – as it looked like he would – then Twitter’s remedy was to take him to court to force him either to close on the original terms (preferred outcome), or (possibly) to pay a settlement. The size of any settlement would probably be decided by the judge, but would likely be larger than the $1B termination fee in the contract. If, on the other hand, it’s the banks who decline to provide the required financing, then Musk can either come up with alternative financing (I think) or he can pay that $1B termination fee to get out of the deal.
Of course Musk would then probably sue the banks for failing to do their part; his chances of winning would depend on their reasons for walking away and the terms of their contract with him. Either way, a lot of very expensive lawyers would be busy for a very long time.
Caveat: I am not an expert in any part of this and haven’t read the contract. I’m basing this largely on the summaries given by Matt Levine from Bloomberg. But I believe that I’ve understood his distillation of the issues correctly. Also, I possibly shouldn’t have referred to the termination fee as a “penalty”, although that’s sort of what it is.
