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Ask HN: What happened to Twitter poison pill?

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Re: Ask HN: What happened to Twitter poison pill?

#81

Post by majkinetor »

egeozcan wrote: post #68
colonwqbang wrote: post #65

Earlier quoted context omitted.

> 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.

Is it possible to acquire up to 51% in atomic move, so there is no fade in that would make poisoning option too late ?

Re: Ask HN: What happened to Twitter poison pill?

#82

Post by csa »

jszymborski wrote: post #55
colechristensen wrote: post #29

The 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?

According to Matt Levine’s column today, the poison pill may have just been a tactical move to guarantee time for negotiations while preventing the possibility of a hostile takeover (a potential BATNA for Musk).

This seems to be what happened.

Re: Ask HN: What happened to Twitter poison pill?

#83

Post by thaumasiotes »

jszymborski wrote: post #55
colechristensen wrote: post #29

The 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 price is the same. Matt Levine's coverage so far has implied that the effect of the poison pill was to force Musk to be more concrete and less hypothetical, which happened.

Re: Ask HN: What happened to Twitter poison pill?

#84

Post by SilasX »

colonwqbang wrote: post #78
emeraldd wrote: post #72

Earlier quoted context omitted.

They aren't taking away anything, they would be diluting the 51% shareholder's shares. They're giving themselves the option to fend off a hostile take over by making the pool bigger so that no one can get to 51% ownership.

Sure, I accept that it's legal in the US. It just seems strange that there isn't some rule saying that the board has to treat shareholders more or less equally. Since the board is elected by the shareholder votes it seems weird that they can just redistribute voting power at will. What if there was some minority shareholder that the other owners disliked for some reason, could they force them out too? Or this power i…

>It just seems strange that there isn't some rule saying that the board has to treat shareholders more or less equally.

AIUI, there is such a rule, and, FWIW, that’s why I found the OP’s explanation[1] somewhat dubious. Deliberately sabotaging the corporation for the benefit of another one that the 51%er owns … seems like the kind of thing that the courts would strike down.

[1] https://news.ycombinator.com/item?id=31160874

Re: Ask HN: What happened to Twitter poison pill?

#85

Post by KingMachiavelli »

vimy wrote: post #44
afavour wrote: post #38

My read on it is that the shareholders didn’t want Musk controlling the company (owning 51%) and dragging them along with him. Being the absurdly rich person he is, he’d likely not care too much about how service changes would affect the stock price. However they are quite happy to let Musk buy all of them out (owning 100%) at a reasonable price then let him do whatever marketshare-tanking moves he wishes. They don’t…

But owning 100 % was Musk's offer all along.

Leaving the option of gaining control via 51% hostile takeover would essentially be a ~50% discount for Elon. If your goal is to sell at the highest price you don't want to count on someones word or intentions.

Plus even if Elon really wants all 100% for reasons, the bank providing funding would certainly want him to consider any cheaper options since it's (nearly) the same gain for them but less risk to finance buying 51% vs 100%.

Re: Ask HN: What happened to Twitter poison pill?

#87

Post by ipaddr »

AnimalMuppet wrote: post #33

I have a very cynical take on this. Assume that the board members are acting for the board members, no one else. If Elon buys Twitter, what happens to the board? Well, he can fire them all. They may prefer to remain board members, with the money and power that comes from that. So the poison pill, while it may be offered in the name of "protecting" the existing shareholders, is really a way for the existing board to r…

https://investor.twitterinc.com/corporate-governance/board-o...

The board includes karaoke maker, computer professor and a salesforce co coo. You might be on to something, I doubt many characters will find themselves on such a high profile board in the future.

Re: Ask HN: What happened to Twitter poison pill?

#88

Post by qiskit »

colechristensen wrote: post #29

The 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

This is simply wrong. The board outright rejected musk's offer and instituted a poison pill to prevent a hostile takeover of twitter by musk. So elon simply bypassed the board of directors and went to the major shareholders. It is the major shareholders who has final say, not the board of directors. Elon convinced enough of the major shareholders to accept his deal and once that happened, the board of directors has no real say. They have to do what the major shareholders say since the major shareholders are the ones who hire and fire the board of directors.

> I.e. the board was saying “you can only buy Twitter if we say so”

The board say "you can't buy twitter". So elon just talked to the board's bosses ( major shareholders ) and the board's bosses said "elon can buy twitter".

Re: Ask HN: What happened to Twitter poison pill?

#89

Post by mrkstu »

majkinetor wrote: post #81
egeozcan wrote: post #68

Earlier quoted context omitted.

As I understand, this happens before anyone acquires 51 percent.

Is it possible to acquire up to 51% in atomic move, so there is no fade in that would make poisoning option too late ?

This is the kind of thing the 15% disclosure rule is designed to prevent.

Re: Ask HN: What happened to Twitter poison pill?

#90

Post by tptacek »

majkinetor wrote: post #81
egeozcan wrote: post #68

Earlier quoted context omitted.

As I understand, this happens before anyone acquires 51 percent.

Is it possible to acquire up to 51% in atomic move, so there is no fade in that would make poisoning option too late ?

No.
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