Seacoaster(1) wrote: ↑Sat Jul 09, 2022 1:43 pm
Peter Brown wrote: ↑Sat Jul 09, 2022 7:24 am
When you read these boards, it’s a good reminder why the framers established the Senate.
: Madison explained that the Senate would be a "necessary fence" against the "fickleness and passion" that tended to influence the attitudes of the general public and members of the House of Representatives. :
The folks commenting on the Musk Twitter deal have no understanding of the complexities nor negotiations, yet seem entirely confident making statements like ‘Musk will pay a $billion’.
If you’d allow for the smallest amount of humility to admit you actually don’t know the situation and these are simply guesses, it wouldn’t be as cringe as it is. But because the FLP are always so sure of themselves when they know absolutely nothing about an issue, it reminds me that the framers knew enough about the mob to fully distrust the mob. They were of course correct, and you can read these boards to understand why.
Musk will sue for the company’s negligence and fraud. He remains the single largest shareholder. He may end up with the company at a lowered price. He may pay to leave. He might become a board member. He might exert influence even without buying the company in full. Maybe he’s already exerted the influence he sought (Berensen is back). Maybe the SEC investigates Twitter for manipulating data. Maybe advertisers demand more transparency on bots. Maybe the business model is impaired as a result.
We don’t know is the issue. Unless you’re on his legal team, or the company’s, you’re just guessing.
The purchase agreement allows Twitter to seek the termination fee or seek specific performance of the deal terms: in other words, they can compel Musk to close the deal on those, now disadvantageous terms. The Delaware Chancery Courts act fast and do on occasion issue orders of specific performance.
I don't know if Musk has any real contractual basis for getting out of the deal; economic change is not a reason that a court would let him sail away free. What is "the company's negligence and fraud"? Or are you -- wait for it -- making stuff up again?
Did Twitter misstate something in a material document? Here is Musk's lawyer's letter to the Twitter Board:
https://drive.google.com/file/d/12C2Kgi ... ZIdR6/view
It is a litany of "stuff we asked for and didn't get" about the performance of the platform and the folks that occupy it. Frankly, it seems a little tenuous as a basis to cancel the deal. If I was betting now, I'd bet there is a flurry of interesting litigation, followed by a payoff somewhat in excess of the $1 billion termination fee.
Is guess it’s the $1bn flat or even a small discount. It’s a problem for Twitter execs to be focused on this for a prolonged period of time. Get their dough and a pound of flesh and move on with bigger existential issues they have.
Online Ad Slump Won’t Be a Blip for Google, Facebook, Others
Players in the segment are facing another tough quarter and beyond
Dan GallagherJuly 6, 2022 7:03 am ET
The combined weight of macroeconomic factors such as rising interest rates, the war in Ukraine and growing inflation took some wind out of the online ad market in the first quarter. And the situation has grown even more fraught since, with inflation alone jumping to a multidecade high in May. Snap Inc. SNAP -0.93%▼ Chief Executive Evan Spiegel said in late May that “the macroeconomic environment has definitely deteriorated further and faster than we expected,” causing the company to warn that revenue and pretax earnings for the second quarter were coming in below the forecast it gave just a month earlier.
That was an ominous sign halfway through the quarter, and Meta Platforms CEO Mark Zuckerberg closed the period with a similar sentiment. In an all-hands meeting with employees last week, Mr. Zuckerberg said the Facebook META -0.76%▼ parent is slashing its engineer-hiring target for the year by 30%. He also called the current state of affairs “one of the worst downturns that we’ve seen in recent history,” according to a report by Reuters. Facebook’s ad business dwarfs Snapchat’s, and analysts currently expect advertising revenue at the social-media giant to show no growth on a year-over-year basis in the second quarter for the first time in the company’s history.
But Facebook isn’t the only one feeling the pain. Combined advertising revenue for Meta and Google-parent Alphabet, GOOG 0.72%▲ along with Twitter, TWTR -5.10%▼ Snap, Pinterest PINS -0.15%▼ and the ad segment of Amazon, AMZN -0.68%▼ is now expected to rise 9% year over year to $97.2 billion in the second quarter, according to consensus estimates by FactSet. That is a notable slowdown from the 17% growth shown in the first quarter and would be the slowest growth since the second quarter of 2020, when the onset of pandemic lockdowns caused a sharp drop in advertising for travel and other key sectors.
Individual results for all six of the aforementioned companies are expected to reflect the second-quarter slowdown, even though macroeconomic factors aren’t weighing on all equally. Google’s core search arm still makes up the bulk of its ad business and has so far proved more resilient than other segments. Thus, Google’s total ad revenue for the second quarter is expected to increase 12% year over year to $56.7 billion.
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Facebook, by contrast, is still dealing with the impact of changes to Apple’s AAPL 0.47%▲ iOS platform last year. And TikTok’s growing clout may also be taking a bigger bite. In a report last week, eMarketer projected that TikTok’s global ad revenue will top $11.6 billion this year—up 200% from last year and surpassing Snap, Twitter and Pinterest in overall size. TikTok also competes with Google’s YouTube, which is expected to show ad revenue growth slowing to 8% year over year in the second quarter after averaging 42% over the last four quarters.
Wall Street currently expects ad growth to pick back up in the second half of the year. But with more executives and experts predicting a recession on the horizon, that prospect looks increasingly dicey. And the modern online ad industry’s resilience in a sustained global recession has yet to be truly tested.
In a report last week, J.P. Morgan’s Doug Anmuth noted that digital advertising accounted for about 12% of total ad spending in the financial crisis period of 2008-09. That compares with 67% last year, “making online spend now far more exposed to broader macro trends,” he wrote. This time, the industry will need to pick up more than a few clicks to recover.