Elon Musk makes $43B unsolicited bid to take Twitter private • Hacker News Board

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#691

Post by DelaneyM » Thu, Apr 14, 2022, 5:03 PM UTC

gunapologist99 wrote: post #521

So Twitter was at $70 per share a year ago. So what? Jack Dorsey was CEO a year ago, too. The share price was $33 less than a month ago. But, despite an absolutely incredible roller-coaster news cycle, things have been definitely trending down at Twitter ($33/share last month), which was reflected in its share price. The current executive team (and Dorsey) had wasted time focusing on things that didn't matter instead…

Everyone currently holding $TWTR believes that the true value is greater than the current price.

To make a successful hostile bid, you need to pay not just "more than the current price", but "more than the holders of 50% of current shares believe the company to be worth". Usually bidders use analyst price targets to guess at the distribution of holders' internal price targets.

This is what makes it so difficult, and why this bid is very likely to be rejected.

(This is easier to explain with a white board, tbh.)

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#692

Post by tgtweak » Thu, Apr 14, 2022, 5:03 PM UTC

yabatopia wrote: post #383

Let's ignore personality and societal issues for a moment and look at the value proposition. The 'best and final offer' of $54.20 per share is just too low to be acceptable for major investors. Just over year ago, Twitter shares traded at about $70 per share. Musk's offer is about 25% lower than last years peak. There's no reason to assume Twitter shares can't reach the same levels ever again, nothing much has change…

The only way it would be too low is if the stock price went up above that.

Reality is it's under that - signaling that it is in fact not too low.

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#693

Post by kebman » Thu, Apr 14, 2022, 5:04 PM UTC

babypuncher wrote: post #662

gunapologist99 wrote: post #521

So Twitter was at $70 per share a year ago. So what? Jack Dorsey was CEO a year ago, too. The share price was $33 less than a month ago. But, despite an absolutely incredible roller-coaster news cycle, things have been definitely trending down at Twitter ($33/share last month), which was reflected in its share price. The current executive team (and Dorsey) had wasted time focusing on things that didn't matter instead…

> Boards have a fiduciary duty to the shareholders. As an all-cash offer, this generates for the shareholders a substantial return with NO RISK, and so the board has a serious legal obligation to carefully review this offer and make a decision. The fact that their primary concern has to be for their shareholders and not whether the sale will be good at all for the rest of humanity is a huge problem in my eyes.

What is it that you think is good or bad for the rest of humanity about this potential sale?

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#694

Post by jdrc » Thu, Apr 14, 2022, 5:04 PM UTC

lumost wrote: post #652

My take, this is about putting a valuation on non-twitter social. Reddit has more users than Twitter, and a valuation 1/5th of twitters. If Twitter is worth 47 billion to someone, then reddit should be worth 50-100 billion. Unfortunately it's not possible to know if Elon has a major stake in any privately held social companies.

The media is usually not profitable, they have other uses. Countless newspaper and tv networks go bankrupt

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#695

Post by cloutchaser » Thu, Apr 14, 2022, 5:05 PM UTC

AlexandrB wrote: post #646

gunapologist99 wrote: post #521

So Twitter was at $70 per share a year ago. So what? Jack Dorsey was CEO a year ago, too. The share price was $33 less than a month ago. But, despite an absolutely incredible roller-coaster news cycle, things have been definitely trending down at Twitter ($33/share last month), which was reflected in its share price. The current executive team (and Dorsey) had wasted time focusing on things that didn't matter instead…

I don't get how the logistics work in a move like this. If you're a shareholder and the board approves the sale are you forced to sell your shares to Elon at the stated price? What if you don't want to sell? Edit: I also wonder how leveraged positions, especially shorts, get resolved.

Depends on the shareholder agreement and how the board fits into that.

By default it would be something like - if the board approved it goes to a shareholder vote, and if 75% or 90% of the shareholders approve the rest are dragged.

I doubt the board can force all shareholders to sell, that would be an insane power position for shareholders

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#696

Post by cloutchaser » Thu, Apr 14, 2022, 5:06 PM UTC

babypuncher wrote: post #662

gunapologist99 wrote: post #521

So Twitter was at $70 per share a year ago. So what? Jack Dorsey was CEO a year ago, too. The share price was $33 less than a month ago. But, despite an absolutely incredible roller-coaster news cycle, things have been definitely trending down at Twitter ($33/share last month), which was reflected in its share price. The current executive team (and Dorsey) had wasted time focusing on things that didn't matter instead…

> Boards have a fiduciary duty to the shareholders. As an all-cash offer, this generates for the shareholders a substantial return with NO RISK, and so the board has a serious legal obligation to carefully review this offer and make a decision. The fact that their primary concern has to be for their shareholders and not whether the sale will be good at all for the rest of humanity is a huge problem in my eyes.

China has a different model. Perhaps move there and try that?

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#697

Post by systemvoltage » Thu, Apr 14, 2022, 5:06 PM UTC

cgtyoder wrote: post #311

This is exactly why individuals should not be allowed to have tens (let alone hundreds!) of billions of dollars in wealth - they become all-powerful and too easily subvert the will of the people. They become their own ruling class, which is unacceptable in a functioning democracy.

Zero to Tesla. It's not like he has hundreds of billions of dollars sitting in cash. Almost all of his wealth is in Tesla/SpaceX. He created value from basically zero.

Didn't steal it from anyone.

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#698

Post by another_devy » Thu, Apr 14, 2022, 5:08 PM UTC

m1117 wrote: post #331

I don't understand how making twitter private will be beneficial for free speech? Isn't it the point that the company ownership is distributed?

It's never about free speech its about investment, money and control over digital media

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#699

Post by hamandcheese » Thu, Apr 14, 2022, 5:09 PM UTC

saurik wrote: post #642

yabatopia wrote: post #383

Let's ignore personality and societal issues for a moment and look at the value proposition. The 'best and final offer' of $54.20 per share is just too low to be acceptable for major investors. Just over year ago, Twitter shares traded at about $70 per share. Musk's offer is about 25% lower than last years peak. There's no reason to assume Twitter shares can't reach the same levels ever again, nothing much has change…

And yet, despite your belief that the majority of the investors should/are valuing the stock at >$70, it is trading at ~$45, which should at least provide some evidence that the majority of shareholders--today, not last year--value it at <$55; to me the next question is "exactly who is voting on this: the shareholders or the board members?", but even either way it doesn't seem insane to me that getting a guaranteed 1…

> which should at least provide some evidence that the majority of shareholders--today, not last year--value it at The price is only determined by who is buying and selling right now. Trading at $45 merely implies a nonzero number of shareholders value Twitter at $45.

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#700

Post by golemotron » Thu, Apr 14, 2022, 5:10 PM UTC

ncmncm wrote: post #580

RustyConsul wrote: post #510

> "if my offer is rejected i will reconsider my ownership in twitter." Thats an immense amount of selling pressure on the stock... This is a threat. He's negotiating with a gun to their head.

To me, the main message is that he wasn't really serious about Mars at all, or even about SpaceX, or Tesla -- never mind global climate catastrophe . Were I a Twitter stockholder I might perceive a different emphasis.

If your bar for "serious" doesn't allow for multi-tasking.