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Twitter board adopts poison pill after Musk’s $43B bid to buy company
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Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company
#112I don’t understand how any board can implement a “poison pill”, not just Twitter but Netflix and others, and not be found working against the interest of shareholders. Can anyone help me understand? You’re categorically changing the profile of the stock. This has a chilling effect on large investors, including but not limited just to Musk, right? Vanguard, for example, has just had its range of further investment lim…
Elon's offer is at the same time an hostile offer, and conditional on obtaining financing from banks. This is never heard of in the history of hostile acquisitions, and is a BIG risk for the board to entertain any attempt by anyone to buy Twitter before they know what their loan percentages are.
What exactly would be the risk for the board?
Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company
#113Earlier quoted context omitted.
What are the options for Elon Musk if he really wanted to counter this poison pill?
He could use the infamous antidote clause.
I think that clause has to be administered within a few hours and that time has already passed. It may be necessary to amputate a portion of the company.
Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company
#114So, I'm not very corporate savvy and this might be a very stupid question. Is there a NON-culture/political reason for all the push back against Musk buying Twitter? From the read, this just seem to be opening the door for someone else to try and take majority control and pining away for the days of Dorsey (which, if looked at objectively, weren't great... just filling an opportunity).
As a shareholder, either you are happy with the price Musk is offering you, or you think the company can do even better long term. Twitter is clearly a very valuable asset, considering this fight is happening in the first place, so it is not inconceivable that >50% of shareholders will want a larger buyout. Heck even if you are completely happy with the terms, pushing back and asking for more is a standard negotiation tactic. They'd be foolish not to try.
Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company
#115Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company
#116Earlier quoted context omitted.
If North Korea offered $60 billion to buy Twitter would Twitter be forced to sell? Not comparing Musk to NK, but money isn't the only consideration when an offer to sell comes in.
Indeed, what happens when Elon starts his own platform instead and uses some of the ~$40 billion he'd otherwise buy Twitter with instead on paying top users of Twitter to exclusively use his platform instead?
> what happens when Elon starts his own platform
He wouldn't bother because it'd be a failure. Twitter's tech stack isn't worth 40 billion, Musk could clone twitter for less than $500m, but just having a platform doesn't accomplish much, the overwhelming majority of twitter users have no reason to leave twitter.
Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company
#117I don’t understand how any board can implement a “poison pill”, not just Twitter but Netflix and others, and not be found working against the interest of shareholders. Can anyone help me understand? You’re categorically changing the profile of the stock. This has a chilling effect on large investors, including but not limited just to Musk, right? Vanguard, for example, has just had its range of further investment lim…
I'm pretty sure a majority of shares of Twitter care about making the most money ahead of everything else. But just offering a 50% premium might not be enough. They'll need to pay taxes on the realized gains and they'll need to find other places to put their money.
Yeah I made 10% getting in after the disclosure was made. I’d actually invest in a twitter owned by Elon and likely ditch all my other profiles too.
A platform that makes money and has free speech would be wonderful. Maybe he can steal Rogan from Spotify too.
Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company
#118Earlier quoted context omitted.
> and not be found working against the interest of shareholders. It depends on what the interests of the shareholders actually is. Monetary only, or are there other considerations they care about? I assume the boards of such companies have had private discussions with the majority shareholders to find out exactly what their priorities are, and then acted accordingly.
>It depends on what the interests of the shareholders actually is. Monetary only, or are there other considerations they care about? Is a board allowed to consider anything but?
Of course they are, major investors regularly push boards to do more ESG for example
Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company
#119Earlier quoted context omitted.
The board of a public company cannot reasonably claim that they’re worth twice(!) what the market currently values their company at simply because they feel it’s true. Unless they have advertising contracts and growth metrics in the pipeline that represent a reasonable doubling of revenue and value, they’re acting legally irresponsibly. Justifying this is difficult. This is objectively a good offer.
The literal value is their share price x total shares. The notional value is at best the NPV of future profit streams. However Twitter's track record on profits are dismal so the claim is dubious legally.
Share prices go up as you buy a company because you buy from the people that value their shares least first.
You can’t just multiply the current price and expect everyone to be willing to sell for that amount.
Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company
#120I don’t understand how any board can implement a “poison pill”, not just Twitter but Netflix and others, and not be found working against the interest of shareholders. Can anyone help me understand? You’re categorically changing the profile of the stock. This has a chilling effect on large investors, including but not limited just to Musk, right? Vanguard, for example, has just had its range of further investment lim…
Elon's offer is at the same time an hostile offer, and conditional on obtaining financing from banks. This is never heard of in the history of hostile acquisitions, and is a BIG risk for the board to entertain any attempt by anyone to buy Twitter before they know what their loan percentages are.
Offers aren't hostile. Trying to take over a company after an offer has been rejected is hostile.