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

Post by 99_00 » Sat, Apr 16, 2022, 12:17 AM UTC

anonymouse008 wrote: post #36

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.

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…

Post by wwweston » Sat, Apr 16, 2022, 12:18 AM UTC

scythe wrote: post #397

mcintyre1994 wrote: post #31

Earlier quoted context omitted.

I think the most famous counter-example would be Netflix in 2012 https://www.bbc.co.uk/news/business-20214401

Icahn was claiming that Netflix was undervalued. To be fair, he was also angling for an acquisition. But a bid like that usually has a half-life; the market trends to a good price — and indeed, Netflix doubled in value by mid-2013. Elon is arguing that Twitter is mismanaged. He already probably pushed them on the edit button, even though they claimed he didn't. If he's right — and Goldman Sachs seems to agree — he co…

Post by PeterisP » Sat, Apr 16, 2022, 12:20 AM UTC

the_svd_doctor wrote: post #337

codedokode wrote: post #333

I don't really understand how this "poison pill" is legal. Imagine that you own a stock that can be sold at free market at $10/share. Then the board decides that whoever buys those shares will have to resell them to board members at $1. This means that now the price of those shares drops to $1 and you have lost $9 per share. How this can be legal?

Same. If I own 10% of a company, how can the board just decide through some mechanism that I now really own like 8% ?

Post by [deleted] » Sat, Apr 16, 2022, 12:23 AM UTC

guyzero wrote: post #390

onelovetwo wrote: post #330

Earlier quoted context omitted.

from my understanding they've been going downhill for quite some time.

"I don't like it" != financial distress. From Twitter's 2021 10K: "FY 2021 Highlights Total revenue was $5.08 billion, an increase of 37%, compared to 2020." 2021 net losses were $221M, which is a big improvement on $1.135B in 2020. Honestly seems like things are really shaping up @ Twitter.

Post by legalcorrection » Sat, Apr 16, 2022, 12:24 AM UTC

yalogin wrote: post #405

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.

Not really, as a counter argument, there is every reason to believe that Musk will make a mockery of twitter and run it into the ground. A social media platform with a lot of responsibility is not for someone as egotistical as Musk. If Zuckerberg is bad, Musk could be catastrophic.