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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

#291

Post by woodruffw »

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…

If I was a member of Twitter's board, Musk's history of erratic public behavior, SEC settlement, and openly hostile attitude towards the company's employees would be more than sufficient to justify my belief that his controlling ownership would not be in the interest of the current average shareholder.

That opinion would also be consistent with how "fiduciary duty" is interpreted by US regulators: companies are not required to perform any particular action that might reasonably be in the interests of shareholders; they must merely show that the company's actions were intended to be in the best interests of the shareholders.

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

#292

Post by doldols »

hedora wrote: post #282
rosndo wrote: post #226

Earlier quoted context omitted.

An ETF isn’t going to “accidentally” exceed 15% ownership of Twitter. Seriously, do you think funds playing with the kind of money to buy 15% of twitter often make careless purchases? >Edit: Also, if Elon is reading this, I'll happily buy 14.9% of twitter, and vote as part of your block. Just pay me enough to cover the sale and taxes, plus 1%. Such an arrangement would make Elon the beneficial owner of your shares.

> Such an arrangement would make Elon the beneficial owner of your shares. Thanks for explaining why that won't work. Presumably, if Elon has a few rich friends, they could use their own money, vote as a block, and the board would still be screwed. I wonder what other schemes would work. B corp, maybe?

> Presumably, if Elon has a few rich friends, they could use their own money, vote as a block, and the board would still be screwed.

But that’s just playing along with the spirit of the rules, not a loophole.

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

#293

Post by tsimionescu »

LocalPCGuy wrote: post #97
tsimionescu wrote: post #60

Earlier quoted context omitted.

> Yes, they need to look out for their shareholders but they also need to do right by the company, and companies can be formed for any legal purpose and everyone (the company and the shareholders) values things differently The board has a lot of leeway into how they achieve profit for the shareholders, but all decisions they make must be nominally in the interest of that goal (assuming we're discussing a for-profit c…

Achieve profit is not the same thing as provide value or best interest of. It could be. It does not have to be.

A for-profit company is there for profit. There is no other way to interpret shareholder value in a for-profit company, for purposes of discussing fiduciary duty.

Now, providing profit/share-holder value need not mean maximizing said profit - it just means that profit must always be considered in any business decision, it can never be entirely ignored in favor of other things.

Note that not even shareholders get to decide what kind of value they expect their board to offer them. That definition of value is set in stone by the type of corporation. The board of a for-profit company has a fiduciary duty to the shareholders of the company as pertains to profits.

If 100% of the shareholders of Twitter voted to ask the board to sacrifice profit for free speech; and the board decided to ignore this request entirely and publicly announced they would limit free speech at every trun to focus on profits, the shareholders would have no chance of winning a breach of fiduciary duty trial against the board. The board has no legal duty to uphold some abstract values that shareholders hold dear, they only have a legal duty to act in the interest of company profit as they see fit.

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

#294

Post by pm90 »

defen wrote: post #217
axg11 wrote: post #129

Earlier quoted context omitted.

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.

> We are in a downturn affecting the entire tech industry, and it’s likely that prices will return to previous levels at some point. So why not take the offer (which is 20% higher than the current market price for the stock) and put the received cashed into other tech stocks? Is Twitter uniquely/excessively down compared to other tech stocks, and due for a bigger rebound?

Because Twitter is not a hedge fund.

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

#296

Post by sangnoir »

politician wrote: post #261
metadat wrote: post #240

Earlier quoted context omitted.

That's a lot to ask when each user account is free. You're basically replicating the US Courts Legal System, except those on trial pay 0% taxes. Not viable. Keep thinking though, we need a hero of an idea to make forward progress on the question of what strategy is best for US-based public companies, and what their role is in showing the world what the gold standard for "freedom of speech" online looks like.

This is why Twitter needs to go private. The current management has no idea how to run a public square without falling back to an authoritarian censorship regime. EDIT: Arguably, much of what I am suggesting can be automated cheaply.

Private companies have less transparency than public companies. You're hoping the owner will be benevolent and okay with losing money indefinitely for the sake of transparency, or if that turns out to be the case - that ownership will not change (e.g. bought out by Murdoch or Carlos Slim)

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

#298

Post by pm90 »

minhazm wrote: post #243
axg11 wrote: post #129

Earlier quoted context omitted.

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.

In 2016 Microsoft acquired LinkedIn at a $26 billion valuation, which was at the time a premium of ~40% or so over the current price, but still lower than their valuation was the previous year. So it isn't unprecedented to accept an offer for an amount lower than your all time high Elon's offer is a 38% premium over the price it was prior to him disclosing his position in the company. > We are in a downturn affecting…

IIRC The Apple privacy changes hit a very specific kind of targeted advertising that Facebook was great at monetizing. I’m not familiar with Twitters ad platform but it’s unlikely to have affected them as hard as they hit FB.

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

#299

Post by sangnoir »

WalterBright wrote: post #17

Every company I know of that did a poison pill to prevent a takeover wound up tanking within a year or two and the shareholders wound up with sand. As a Twitter shareholder myself, the board is making a big mistake. As a legal matter, I don't understand how a board could sell shares to other shareholders at a lower price than to the entity wanting to buy shares to gain control.

Isn't your sample biased? Distressed companies are more likely to attract takeover attempts (hostile or not) compared to healthy ones; and they are also more likely to tank. As far as I can tell, Twitter is not in financial distress.

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

#300

Post by tsimionescu »

beaned wrote: post #263
mike_d wrote: post #239

Earlier quoted context omitted.

> Edit: Also, if Elon is reading this, I'll happily buy 14.9% of twitter, and vote as part of your block. Just pay me enough to cover the sale and taxes, plus 1%. You might want to speak with a lawyer who is familiar with inchoate crime. What you publicly proposed to Elon is a crime, since you intend to conceal beneficial ownership of shares.

Where does the concealment come in?

If you are claiming you own the shares when in fact Elon payed for them, you are concealing that Elon is the beneficial owner.

If you admit that he is the beneficial owner and you are just an intermediary, then the poison pill provision is not skirted.

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