The poison pill would only take effect if someone purchased >15% of shares on the open market—going around the board. Elon made an offer to the board directly which they can accept without triggering the poison pill.
Ask HN: What happened to Twitter poison pill?
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Re: Ask HN: What happened to Twitter poison pill?
#12The poison pill provision and Elon's takeover are not mutually exclusive. It's in the board's best interest to gain maximum leverage over Elon. A poison pill puts the board in a better negotiating position in discussions with Elon allowing them to get better terms. Once terms are agreed they are free to repeal the poison pill.
Elon submitted his final terms, there won't be negotiations, based on current public statements. As noted by others, the poison pill is not even in actual effect.
Re: Ask HN: What happened to Twitter poison pill?
#13Nothing is ever set in stone. He had the money and $43 billion is too enticing to pass up given that the stock has done nothing since the IPO.
Re: Ask HN: What happened to Twitter poison pill?
#14Poison pill can be used for price negotiation, not just blocking an offer. Prevent hostile takeover and force the buyer into the negotiation table. They are now in the negotiation table.
The rumor is that the offer to be accepted is the same, so it wouldn’t have worked as intended, but that doesn’t mean it wasn’t worth trying.
Re: Ask HN: What happened to Twitter poison pill?
#15What caused the board to change course was that Elon Musk filed with the SEC showcasing that he actually has $46 billion in funding secured, via an amended 13D filing [1].
This led Twitter's board to take his offer more seriously and many shareholders to ask the company not to let the opportunity for a deal slip away [2].
[1] https://www.sec.gov/Archives/edgar/data/1418091/000110465922...
[2] https://www.reuters.com/technology/exclusive-twitter-set-acc...
Re: Ask HN: What happened to Twitter poison pill?
#16The idea of the ”poison pill” is to make it possible for board members to strenghten their ownership by issuing new shares to existing owners with a discount in the event that one single outside entity buys a significant portion of the shares. It is artificial dilution, which in practice makes it possible for the board to cause heavy short-term losses to anyone attempting a hostile takeover: the market reaction to di…
In essence.
The thing to keep in mind in all of this is none of this was ever about what's best for the users (current ownership vs. new ownership). It was always about whether the existing owners would get screwed in the takeover. User welfare barely enters into the story.
This is France and Germany hammering out the details of who owns Alsace–Lorraine; Twitter users themselves are just Alsace–Lorraine peasant-farmers.
Re: Ask HN: What happened to Twitter poison pill?
#17What caused the board to change course was that Elon Musk filed with the SEC showcasing that he actually has $46 billion in funding secured, via an amended 13D filing [1]. This led Twitter's board to take his offer more seriously and many shareholders to ask the company not to let the opportunity for a deal slip away [2]. [1] https://www.sec.gov/Archives/edgar/data/1418091/000110465922... [2] https://www.reuters.com/…
I mean, you have to respect Elon's consistency, if not the substance - "funding secured" filing to the SEC on 04/20 for an offer at $54.20.
Re: Ask HN: What happened to Twitter poison pill?
#18Nothing is ever set in stone. He had the money and $43 billion is too enticing to pass up given that the stock has done nothing since the IPO.
Critically, the price didn’t even shift that much given his takeover offer… which is just nuts. If someone offers to buy all the stock and it doesn’t shift up to at least close to the offering price, then something is wrong with either public perception of the company or the entire stock market.
It eventually drifted up, but you see other companies where a hostile takeover offer is cause to halt trading due to how fast the price spikes…. Which did not happen for Twitter. Twitter is not a “blue chip” stock which people expect stability from, perhaps even a gasp dividend… but nope, it’s a tech stock with none of that… yet is weirdly stable. That’s screams “complacency” to me and complacency is fertile ground for business, either by outside forces via hostile takeover and new management or a new disruption from a new market entrance. Given the network effect pressure it’s obvious that hostile takeover looks, at least from a “running the business” perspective, to be an obvious move.
Like many business decisions it just looks to me like “who will gamble on a bet this big”… and these days it’s individual billionaires who can afford to make bets like this. It’s a second golden age of capitalism, and I’m looking forward to the next Great Depression and the much needed cultural rest wth respect to assholes with too much money.
Re: Ask HN: What happened to Twitter poison pill?
#19The poison pill provision and Elon's takeover are not mutually exclusive. It's in the board's best interest to gain maximum leverage over Elon. A poison pill puts the board in a better negotiating position in discussions with Elon allowing them to get better terms. Once terms are agreed they are free to repeal the poison pill.
Elon submitted his final terms, there won't be negotiations, based on current public statements. As noted by others, the poison pill is not even in actual effect.
Well,
1) He publicly claimed it was his final terms, but there is no reason a board should not at least try to use any leverage they have to try to interrogate that claim.
2) The valuation is not the only thing the board and Musk need to agree to. There are break up terms, ability to accept a higher offer if one materializes, liability in case of funding breakdowns, antitrust assurances, etc etc. So again, any leverage is useful.
Re: Ask HN: What happened to Twitter poison pill?
#20Nothing is ever set in stone. He had the money and $43 billion is too enticing to pass up given that the stock has done nothing since the IPO.
Critically, the price didn’t even shift that much given his takeover offer… which is just nuts. If someone offers to buy all the stock and it doesn’t shift up to at least close to the offering price, then something is wrong with either public perception of the company or the entire stock market. It eventually drifted up, but you see other companies where a hostile takeover offer is cause to halt trading due to how fa…
They might not want to end up like Yahoo where there was an offer not accepted then the stock just went down and down from there. With the near certain recession coming the board would be on the hot seat hoping that the stock price would eventually go back up while Elon would be nagging them from the sidelines the entire time.