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

Post by JumpCrisscross » Fri, Apr 15, 2022, 11:55 PM UTC

repsilat wrote: post #366

rgbrenner wrote: post #350

Earlier quoted context omitted.

That’s not the way it works. So of course it sounds illegal because you’ve made up an illegal scenario. When the board triggers this clause, they may sell shares to existing shareholders at a discount. These are new shares. Companies have every right to sell shares outside of the exchange they’re listed on… and they do that all the time, through employee grants or options, for example. When raising funds they general…

A company can't pay a dividend to some shareholders but not others. This action would effectively be giving in-the-money call options to some shareholders but not others. Probably legal, but pretty dodgy.

Post by jacquesm » Fri, Apr 15, 2022, 11:56 PM UTC

bmitc wrote: post #357

jacquesm wrote: post #182

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No it isn't. They key is that management and board are against it and the deal is still pursued by the (potential) acquirer. It is perfectly possible to initiate a conversation regarding an acquisition and this is not a hostile takeover per-se though it could develop into one. https://www.investopedia.com/terms/h/hostiletakeover.asp

Musk made an unsolicited, and what seems to be a non-investment choice, purchase of almost 10% of the shares and wanted to join the board. As far as I can tell, the board made his board seat contingent on Musk not buying more than 14.9% and Musk said no, and a few days later offered to buy the company outright. Now Twitter is taking moves to prevent a hostile takeover. That sounds like a hostile takeover to me.

Post by aleister_777 » Fri, Apr 15, 2022, 11:57 PM UTC

root_axis wrote: post #116

loceng wrote: post #85

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Indeed, what happens when Elon starts his own platform instead and uses some of the ~$40 billion he'd otherwise buy Twitter with instead on paying top users of Twitter to exclusively use his platform instead?

> what happens when Elon starts his own platform He wouldn't bother because it'd be a failure. Twitter's tech stack isn't worth 40 billion, Musk could clone twitter for less than $500m, but just having a platform doesn't accomplish much, the overwhelming majority of twitter users have no reason to leave twitter.

Post by woodruffw » Fri, Apr 15, 2022, 11:57 PM UTC

systemvoltage wrote: post #373

woodruffw wrote: post #291

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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.

Post by JumpCrisscross » Fri, Apr 15, 2022, 11:59 PM UTC

Ericson2314 wrote: post #370

woodruffw wrote: post #291

Earlier quoted context omitted.

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 fate of the company after it has been taken private doesn't matter as far as "fiduciary duty" is concerned.