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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?
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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…
He can buy one of those other competitors used by right-wing folks. Hell, if "free speech" is so important to him and to everyone else he wants to rescue he can just tweet to use those other platforms. It's certainly cheaper.
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No, a board is mandated to act in the best interests of the shareholders. That might be different than just maximizing the share price. They may believe this is a bad idea for the company as a whole, and that long term, it's objectively better for the company to not be owned by Musk.
isn't musks offer to buy out all the shareholders. i.e. lets take a crazy example. you have a company that is worth $1mil and we only imagine that it can be worth $100mil (based on the size of the market we are addressing). someone comes and offers $200mil but we know he will shut the company down (i.e. liquidate all its assets, or even simply the desire to destroy the company). While this might be sad for the compan…
That is your assertion/opinion (yes, shared by many, sure). But it's not the only opinion in this case, and so I don't think the analogy holds.
Sure, I could see in the abstract times where an offer it just unavoidably good, and so it would not be in the best interest of shareholders to take it. But in this specific instance, there is a lot to be said on both sides of the offer (taking vs. rejecting it).
I would also argue that, depending on the purpose and goals of the company, knowing that a person intends to shut it down would be a reason to value existing (in order to continue carrying out their purpose) over money.
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No, a board is mandated to act in the best interests of the shareholders. That might be different than just maximizing the share price. They may believe this is a bad idea for the company as a whole, and that long term, it's objectively better for the company to not be owned by Musk.
isn't musks offer to buy out all the shareholders. i.e. lets take a crazy example. you have a company that is worth $1mil and we only imagine that it can be worth $100mil (based on the size of the market we are addressing). someone comes and offers $200mil but we know he will shut the company down (i.e. liquidate all its assets, or even simply the desire to destroy the company). While this might be sad for the compan…
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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.
>They'll need to pay taxes on the realized gains The bulk of the holders of stock in most public companies are institutional investors that don't need to pay taxes on the realized gains.
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Not everyone buys a stock for a quick short-term turnaround. If I expect Twitter to 20x in the next 5 years why would I want to sell my share to Elon? And existing investors all have the option to cash out today for just 17% less than Musk's final offer.
Twitter has operated for 16 years and public for about 10, explosive growth of their userbase is in their past and monetization strategies have already been implemented for years. There is no reason to believe it has the potential for such growth.
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.
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…
So let's say you put in a shareholder rights plan that allows all current shareholders to buy 10 new, discounted shares whenever a new shareholder reaches 20% ownership and for every share they buy from then on. That effectively dilutes that one owner without anyone else, and if they continue to buy it makes all the other shareholders much more money.
That's not always legal, but it would help the interests of shareholders.
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isn't musks offer to buy out all the shareholders. i.e. lets take a crazy example. you have a company that is worth $1mil and we only imagine that it can be worth $100mil (based on the size of the market we are addressing). someone comes and offers $200mil but we know he will shut the company down (i.e. liquidate all its assets, or even simply the desire to destroy the company). While this might be sad for the compan…
Sure - if an offer is greater than the conceivable return then of course you take it, but Musk's offer is less than the stock traded at 6 months ago and 30% below the stock's all-time-high from 14 months ago.
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You're claiming that Musk's purchase of twitter is objectively good for shareholders
The board’s mandate is to maximize shareholder value. They have an offer that will objectively maximize that value. To scorn it in favor of intangibles is to act against the interest of shareholders.