I don't think he misread the market. I think he didn't anticipate the Lakers season going so badly. The extension was offered before the season or at the very early parts of the season and Lakers was the favourite the win championship. So he was expecting at least a deep playoff run and possibly a ring at the end of it and thought he can get a better offer after a successful playoff run with Lakers. The season crashed and burned in the 1st round so all his calculations went out of the window. If the same contract was offered after Lakers got eliminated by Suns, I think he would have signed it for sure.
I also think he is quite a bit of problem in locker room, especially in Atlanta days and I don't think he has improved in that regard.
I remember one particular insider quote when he was fighting with Dwight in Atlanta and the whole locker room was actually siding with Dwight who was usually not very well-liked in the locker rooms either. The quote was something like "How terrible Dennis must be in that locker room that he even makes Dwight look like the good guy in that fight "
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