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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
#322Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company
#323Earlier quoted context omitted.
Wait, if some ETF accidentally exceeds 15%, then what? First of all, that'll screw over a bunch of small investors, right? Second, could Elon swoop in at that point? 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%.
> 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.
> What you publicly proposed to Elon is a crime, since you intend to conceal beneficial ownership of shares.
Not really.
Setting aside the other issues, first and foremost this is obviously a joke. Prosecution would have to establish mens rea for this to rise to a criminal act. Do you think anyone could prove true intent for these events to unfold, based on this comment?
Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company
#324Earlier quoted context omitted.
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.
If someone offered to buy your house at a 25% premium, would you sell? A house is a place to live at, in addition to having a dollar value, and so is Twitter - a powerfool tool to control speech, in addition to its dollar value on the market.
Absolutely, buy another one at market value and give the buyers my card for the next time they want to give me $xxx000.
Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company
#325Earlier quoted context omitted.
I don't immediately buy the logic of "Stock A hit a peak of $X last year, therefore that is the correct price/valuation, and not the lower price it is right now" If Twitter was worth more, it'd be worth more. With that logic, you should put a huge chunk of your savings into Twitter to benefit from the insight, as it's currently trading at 39% below its 52-week high.
The argument is not that is worth more, it is that it can be worth more in the future than Musk offer. No one can predict the future, but it is a legitimate reason to believe it can be worth more than $54 in the future and pointing that it was worth more last year is just an argument for the belief. Which makes sense to me. As legitimate as it is to believe that the stock price will never again reach $54.
> The argument is not that is worth more, it is that it can be worth more in the future than Musk offer.
Then it should be priced for discounted future cash flow and value.
Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company
#326I 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…
Isn’t it still possible for Musk to make a tender offer which then would have to go to a shareholder vote, or for the board to accept (or put to shareholder vote) the offer he did make? The point of the poison pill is that it prevents a certain type of hostile takeover and you may have reasonable opinions about whether or not such clauses are good/should be allowed, but I don’t think they stop takeovers in general, right?
Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company
#327Every 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.
I think the most famous counter-example would be Netflix in 2012 https://www.bbc.co.uk/news/business-20214401
And Disney, twice.
https://www.upi.com/amp/Archives/1984/06/11/Walt-Disney-Prod...
Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company
#328Earlier quoted context omitted.
Read some Matt Levine, he's way more articulate and makes finance quite fun. But if I were to take a stab at it: The market has been so weird recently that stock splits - which according to previous theoretical belief do not create shareholder value - have in fact increased the share price for extended periods. So issuing stock for whatever reason (high price, poison pill) could be seen as shareholder maximizing. One…
> The market has been so weird recently that stock splits - which according to previous theoretical belief do not create shareholder value - have in fact increased the share price for extended periods You're right that theoretically, they shouldn't create value, but I think even back to the 80s and 90s it's been shown that companies that go through a split tend to out perform the market for years after the split. The…
> even back to the 80s and 90s it's been shown that companies that go through a split tend to out perform the market for years after the split
Going back to the late 60s [1].
[1] https://www.researchgate.net/profile/Hemang-Desai-2/publicat...
Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company
#329Earlier quoted context omitted.
The idea that the board's fiduciary means they must maximize profits at the expense of all else is a bit of a myth. 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. It's generally been upheld that the board has a lot of autonomy and, outside of gr…
Under DE law, my understanding is that you are slightly off on this. Boards do have a duty to maximize shareholder value. THAT SAID, the business judgement rule provides that judges will not second guess the board absent evidence of gross negligence or total disregard of duty. This is because the Delaware court has decided that judges are not better than boards at evaluating business decisions. BUT! Overcoming the BJ…
> have a duty to maximize shareholder value
Not to maximize profits. Courts give companies a wide berth in defining shareholder value.
Re: Twitter board adopts poison pill after Musk’s $43B bid to buy company
#330Every 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.
from my understanding they've been going downhill for quite some time.