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

cnbc.com

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

#371

Post by drstewart »

dev_tty01 wrote: post #233
nickysielicki wrote: post #41

Earlier quoted context omitted.

Given that it’s at a share price premium for 90%+ of the lifetime of the stock since IPO, yes. Most shares were bought below the price Musk is asking.

Today's price and the 'expected' future price is all that matters. The 90% lifetime price history is not relevant. All transactions of this nature are based on future value. The offer is only an 18% premium at a time when many tech stocks are being hammered due to extrinsic reasons. It is not a serious offer.

I take it you're highly invested in Twitter stock given how confident you are it's going to go up by more than 20%?

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

#372

Post by Ekaros »

adsteel_ wrote: post #354
eqmvii wrote: post #343

Earlier quoted context omitted.

They can always do that, by just issuing more shares. In fact, if you buy X shares, the percentage of the company you own could well decline over time. Or increase, in the case of stock buybacks.

Are there guardrails on this? This comment makes it sound like the board can print their own money.

There is also question of market demand... There is not telling that those shares actually sell at market price.

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

#373

Post by systemvoltage »

woodruffw wrote: post #291
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 r…

One can equally argue that opens sourcing Twitter algorithm and building trust would bring incalculable number of new users, have a profound impact on their ad business and not to mention, cut down their competitor's moat. People will flock to Twitter like bees. Ad revenue + subscription would skyrocket.

So, it can go either way and can be argued either way.

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

#374

Post by aleister_777 »

avs733 wrote: post #83
philistine wrote: post #77

Earlier quoted context omitted.

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.

It would be simple for them to say 'this is not a serious offer' no matter the premium that is a good faith way of rejecting it. I could offer them $150 a share tomorrow, contingent on financing and would get laughed out of the room.

You're not the richest man in the world. It works different if you happen to be though.

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

#375

Post by prepend »

samhw wrote: post #272
colinmhayes wrote: post #177

Earlier quoted context omitted.

Twitter has no equity. There's nothing to leverage.

Unless I'm missing something, 'leveraged buyout' doesn't specify that it's Twitter's equity which has to be leveraged. Off the top of my head, I think Elon Musk has some other bits and pieces which he could scrounge together for collateral.

No, leveraged buyout means you use the equity of the company purchased as the backing for the loan.

If you borrow from somewhere else it’s just a buyout.

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

#376

Post by luckydata »

friesfreeze wrote: post #320
tuckerman wrote: post #25

Earlier 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…

you're confused. It's not the law that said boards have duty to maximize shareholder value, it was Jack Welch, gone but not soon enough.

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

#377

Post by SilasX »

woodruffw wrote: post #291
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 r…

The problem is, this plan applies much broader than Musk, and penalizes even the “good” activist/takeover artists.

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

#378

Post by lucb1e »

To explain the title:

> a limited duration shareholder rights plan, often called a “poison pill,”

> Under the new structure, if any person or group acquires beneficial ownership of at least 15% of Twitter’s outstanding common stock without the board’s approval, other shareholders will be allowed to purchase additional shares at a discount [until] April 14, 2023.

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

#379

Post by AlbertCory »

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?

Rookie mistake: the fact that a stock was once higher is no indication whatsoever that is "worth" that much. That was then, now is now.

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

#380

Post by aleister_777 »

dev_tty01 wrote: post #233
nickysielicki wrote: post #41

Earlier quoted context omitted.

Given that it’s at a share price premium for 90%+ of the lifetime of the stock since IPO, yes. Most shares were bought below the price Musk is asking.

Today's price and the 'expected' future price is all that matters. The 90% lifetime price history is not relevant. All transactions of this nature are based on future value. The offer is only an 18% premium at a time when many tech stocks are being hammered due to extrinsic reasons. It is not a serious offer.

It closed $.18 above initial offer price in 2013.
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