Twitter board adopts poison pill after Musk’s $43B bid to buy company • Hacker News Board

Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company

#121

Post by riccardomc » Fri, Apr 15, 2022, 8:43 PM UTC

RosanaAnaDana wrote: post #90

SkyMarshal wrote: post #61

Earlier 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?

Yes. The law doesn't bind directors to maximize shareholders value.

https://www.reddit.com/r/law/comments/3pv8bh/comment/cw9t52d...

Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company

#122

Post by twblalock » Fri, Apr 15, 2022, 8:44 PM UTC

alphabetting wrote: post #58

memish wrote: post #27

Earlier quoted context omitted.

As a shareholder and end user of the product, I agree.

you want to cash out with a 20% bump and be out of the stock during a huge tech equity downturn when the stock was over 60% higher last year?

A 20% bump with zero risk? Yes please!

Even if you think Twitter stock will go up 20% next year, you'd want to take this offer. If you think it will go up 50% next year, you might still take the offer because of the risk:reward ratio.

Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company

#123

Post by paxys » Fri, Apr 15, 2022, 8:45 PM UTC

nickysielicki wrote: post #16

s17n wrote: post #12

Earlier quoted context omitted.

That's how the game is played. If you want to take over a company without the consent of its executives, it's going to be a fight and you're probably going to lose.

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.

Somewhere between 50% to 100% is the standard premium in all such acquisitions. As it stands Musk is offering 17% extra. Of course that takes the existing bump that the stock got from his initial purchase into consideration, but investors already have the ability to cash out at the current price so that lessens the attractiveness of the offer.

Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company

#124

Post by computerdork » Fri, Apr 15, 2022, 8:45 PM UTC

First off, I should say I think Elon is the man. What he's been doing at "engineering" companies is of course absolutely incredible (go Starship!). But not so sure he should be mucking around with a social-networking/media company, in which messy social and legal rules are even more important than the technologies themselves. Yeah, his idea that free speech should be the overriding principle is at it's heart true, but tell that to Mark Zuckerberg and FB (as many of us here know, he originally was saying something similar years ago, that it wasn't FB responsibility to moderate content, but then it became known that many organizations and states are using bots and companies dedicated to promoting their own agendas. How do you stop something like this??). Free speech is an ideal that must be balanced with other ideals like protecting individual people & groups against defamation and libel amongst other things. Not sure an intense, engineering mind like Elon is the right person to wade into these very murky waters. And, have a feeling Elon wouldn't even enjoy working on a problem like this (as a software engineer myself, don't think I would either!)

Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company

#125

Post by propogandist » Fri, Apr 15, 2022, 8:47 PM UTC

fairity wrote: post #66

People are overlooking the fact that a poison pill will likely increase the price of Musk's final offer, and in doing so will maximize shareholder value. Put another way, Musk may be willing to pay a lot more than a 25% premium for Twitter (he already said he doesn't care about price). Without this poison pill, Musk can force a takeover by accumulating shares. With this poison pill, the board has leverage to maximize…

or the stock can be dumped with public fanfare, bringing it to a fantastically low price. Then, it can be purchased back, even with the 25% premium, likely for the same total price.

Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company

#126

Post by matthewdgreen » Fri, Apr 15, 2022, 8:49 PM UTC

loceng wrote: post #103

alphabetting wrote: post #58

Earlier quoted context omitted.

you want to cash out with a 20% bump and be out of the stock during a huge tech equity downturn when the stock was over 60% higher last year?

Elon said he'd keep as many shareholders as he's legally allowed to.

What does it mean to keep shareholders in a private company. Isn't there a limit of 2,000 or so?

Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company

#127

Post by recuter » Fri, Apr 15, 2022, 8:49 PM UTC

nickysielicki wrote: post #29

I 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 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?

Correct. Hence the term poison pill. Now nobody else will be interested in buying them either and Elon selling out will tank the stock. As a reminder their stock steadily dropped all the way to $14 after the initial IPO pop and they've been losing money since before Covid.

Woke means broke I guess. I think his plan B will be to start a competitor. I'm very tempted to heavily short as soon as he walks away definitively.

As to your question of, won't the other shareholders get mad at the board and potentially sue them - I think the board is drinking their own koolaid.

Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company

#128

Post by krona » Fri, Apr 15, 2022, 8:50 PM UTC

philistine wrote: post #77

nickysielicki wrote: post #29

I 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's wrong with a leveraged buyout, for example? It seems like the norm these days, not the exception.

Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company

#129

Post by axg11 » Fri, Apr 15, 2022, 8:50 PM UTC

UnpossibleJim wrote: post #105

So, 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).

The pushback is simple: Twitter stock price was higher than Musk’s offer for most of 2021. We are in a downturn affecting the entire tech industry, and it’s likely that prices will return to previous levels at some point. Elon’s offer is a lowball and Twitter can bring more value to shareholders with or without Elon.

Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company

#130

Post by hackernewds » Fri, Apr 15, 2022, 8:51 PM UTC

loceng wrote: post #103

alphabetting wrote: post #58

Earlier quoted context omitted.

you want to cash out with a 20% bump and be out of the stock during a huge tech equity downturn when the stock was over 60% higher last year?

Elon said he'd keep as many shareholders as he's legally allowed to.

"Elon said" is not a stamp of trust anymore. Elon also said TSLA would accept Dogecoin, which he had accumulated prior to communicating it. Then he sold it off.

History should be a lesson here, it's almost Deja Vu with Twitter