Earlier quoted context omitted.
But owning 100 % was Musk's offer all along.
Yes, this has also confused me. What is so different now than 10 days ago?
Nothing is different. This is not a hostile takeover
Ask HN: What happened to Twitter poison pill?
61–70 of 303 posts
Re: Ask HN: What happened to Twitter poison pill?
#62Re: Ask HN: What happened to Twitter poison pill?
#63During a hostile takeover, someone buys 51% of the shares. They then elect a board of people who will approve whatever they want.
Then they can do things like 'merge' the company with some other company they own at a board-approved value-per-share. That value will be much lower than what they paid per share when buying it on the open market, but not so low that the government gets involved. Eg: Musk buys the shares at $50/share, and then 'merges' the company at $25/share, effectively forcing 49% of the shares to be sold at half price. Those shareholders get screwed because they didn't sell their shares during the initial takeover.
Edit: Or, just run the company however they want and share the profits with the other 49%, but ignore their votes, etc.
The Poison Pill says "If a hostile takeover starts, we'll create and sell new shares at a reduced price to existing shareholders- other than the attacker- to prevent the 51% scenario". This is done not to prevent any takeover, but in the interest of the 49% of holdouts who would have been screwed over. It's an effective block against the takeover.
The board represents ALL the shareholders, after all. They don't want to see anyone get screwed.
But now Musk has made a deal that the board has approved. All shareholders get a specific price that is approved. The board wants this to happen, so there's no poison pill.
Re: Ask HN: What happened to Twitter poison pill?
#64During a hostile takeover, someone buys 51% of the shares. They then elect a board of people who will approve whatever they want. Then they can do things like 'merge' the company with some other company they own at a board-approved value-per-share. That value will be much lower than what they paid per share when buying it on the open market, but not so low that the government gets involved. Eg: Musk buys the shares a…
I just wanted to thank you for this. This is the most succinct and easy-to-understand-for-non-investors explanation of the concept I've seen and now I think I finally understand it.
Re: Ask HN: What happened to Twitter poison pill?
#65During a hostile takeover, someone buys 51% of the shares. They then elect a board of people who will approve whatever they want. Then they can do things like 'merge' the company with some other company they own at a board-approved value-per-share. That value will be much lower than what they paid per share when buying it on the open market, but not so low that the government gets involved. Eg: Musk buys the shares a…
> The board represents ALL the shareholders, after all.
This is the part I don't get. The person who bought 51% of shares is also a shareholder. How come the board can discriminate against a single owner like this, just taking away their shares by force. Could they do it to any existing owner if they wanted?
Re: Ask HN: What happened to Twitter poison pill?
#66The poison pill says elon cant buy more but current shareholders can buy more at a discount relative to the stock market. Basically Elon was just going to shell out slightly more money or fail and everyone who didn't buy is screwed. It however takes shareholders to want to buy more. Twitter is quite undefended. Poison pill was never going to be effective in any major way. At most they were going to delay the inevitab…
> However even a saudi prince incorrectly believed he still owned twitter stock. Wait, did I miss something on this? Last I had seen he still owned the stock but rejected Musk's offer.
https://twitter.com/Kaitain_US/status/1514645842463891463/ph...
https://twitter.com/zerohedge/status/1514747126210863108
He sold his shares in 2018.
What do you think made him sell in 2018 but still think he owned stock?
Re: Ask HN: What happened to Twitter poison pill?
#67The poison pill was intended to prevent a takeover without the board’s approval (buying 51% on the open market) The board is negotiating an approved takeover which is entirely different I.e. the board was saying “you can only buy Twitter if we say so” There was no reversal of intentions
Does anyone know if the terms were made more favourable to Twitter since the adoption of the Poison Pill?
The key change was that funding is now secured; the initial bid was contingent on securing funding.
Re: Ask HN: What happened to Twitter poison pill?
#68During a hostile takeover, someone buys 51% of the shares. They then elect a board of people who will approve whatever they want. Then they can do things like 'merge' the company with some other company they own at a board-approved value-per-share. That value will be much lower than what they paid per share when buying it on the open market, but not so low that the government gets involved. Eg: Musk buys the shares a…
> The board represents ALL the shareholders, after all. This is the part I don't get. The person who bought 51% of shares is also a shareholder. How come the board can discriminate against a single owner like this, just taking away their shares by force. Could they do it to any existing owner if they wanted?
As I understand, this happens before anyone acquires 51 percent.
Re: Ask HN: What happened to Twitter poison pill?
#69I assumed that the board did't want to end up in court for breaching their fiduciary duty [1]. But that could just be spin.
Re: Ask HN: What happened to Twitter poison pill?
#70What 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.
It's amazing. You have to think that $54.20 is a number that Musk insisted on just for a prank. Do we seriously believe that the deal wouldn't have been done at a round $54? If you think it could, that's Musk overspending by >$150M in order to make a pot joke.