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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?

#251

Post by bezospen15 »

tptacek wrote: post #97

Nobody knows yet why the board relented, but the scuttlebutt seems to be that Twitter arranged an internal valuation once Musk put a price on the company, presumably as justification for an internal plan that they'd announce as their alternative to acquisition, and the valuation actually showed Musk was overpaying for the income Twitter was likely to generate. (If the board hadn't relented, Musk's next step would hav…

The days of social media are over... You'll never see another valued at this. We're entering tech bubble 2.0

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

#252

Post by pbhjpbhj »

lvnfg wrote: post #198
krick wrote: post #175

Earlier quoted context omitted.

It seems you don't understand the question. I understand that the board can decide value per share. Basically everyone in this thread said this at least once, which is unnecessary, since that's basically what was stated in the root post, and that's why I asked the question in the first place! The question is how this is supposed to be fair. Because, once again, if you make me to sell my property for anything less tha…

The board cannot, by itself, decide the value per share. The board can present its opinion that the deal is fair by approving it, and suggest that all shareholders take this course of action by subjecting the deal for shareholder vote. If the majority of shareholders agree by voting in favor, then the company will be sold, even if a significant minority disagrees, because the company is structured to act according to…

It would be good to get confirmation on this as it contradicts statements upthread saying the board, in USA [though I'd expect it might be specific to a stock market], decided on behalf of the shareholders (to whom they have a duty).

Someone noted the UK position required shareholder assent, which sounds like what you're saying here.

If shareholders vote that sounds 'fair'. If the board decided and shareholders are obliged to go with it as that's how shares are [in some particular jurisdiction/market] then it being fair seems of no concern to that system (as a sibling content intimated).

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

#253

Post by drexlspivey »

tempnow987 wrote: post #221
drexlspivey wrote: post #153

Earlier quoted context omitted.

The original "Funding Secured" tweet was about taking Tesla private at $420

Which would have been a deal actually for whoever did that at $420. But yeah, I wouldn't call him a normal MBA business type

The $420 price was also before a 5-to-1 split if I remember correctly so that would have been a 13x bagger

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

#254

Post by lupire »

bezospen15 wrote: post #250
hammock wrote: post #102

Earlier quoted context omitted.

Your reply merely clarifies that this sale is not a hostile takeover. It doesn’t seem to answer the question, “What caused the board to change the direction 180 and now closing the deal with Musk?”

Welp billionaires are the new hostile takeover. They can just straight up buy anything they want and skip the 51% vote stuff. This needs to be prevented in the future. The racist racist at right just bought Twitter because they're tired of being silenced. Users will just go elsewhere, rip Twitter and thanks for making Elon poor, he was getting annoying.

Regardless of the rest, Elon Musk losing a subatantial fraction of $45B won't make him poor.

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

#255

Post by kgwgk »

saagarjha wrote: post #247
mise_en_place wrote: post #214

Earlier quoted context omitted.

Similar thing happened to me when AMD acquired Xilinx. I got AMD stock and some cash. These types of transactions are usually automated, by an entity like DTCC I would guess.

Didn't XLNX turn into AMD directly at some fixed rate?

The exchange rate was not an integer. If you have to receive a fractional number of shares it’s rounded down and you get a cash payment for the rest.

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

#256

Post by lupire »

jdasdf wrote: post #95
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?

They are not discriminating. Elon can purchase the same amount of stocks (proportionally) at the same price as every other shareholder. It's just that since the strike price is lower than the price he is offering to buy the company at, other investors are better off exercising their warrants and then selling to elon.

Why do you believe that, against what Twitter board actually said and how other poison pills worked in the past?

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

#257

Post by mcv »

mabbo wrote: post #63

During 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…

But doesn't the reduced cost screw all shareholders out of their value?

Besides, when the 51% owner decides to merge at a lower price, can't other shareholders simply refuse to sell?

All this makes it sounds like shareholders have a lot less power than I used to think they had.

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

#258

Post by lupire »

omegalulw wrote: post #223
mabbo wrote: post #63

During 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…

> During a hostile takeover, someone buys 51% of the shares. They then elect a board of people who will approve whatever they want. This is confusing. During the TWTR discussions, one that regularly came out is the importance of a board's fiduciary duty. Buying 51% doesn't let you take the company private, and merging at 50% of the price seems like a monumentally indefensible decision, especially when it is with the…

Management gas extreme leeway to use it's judgement. All they have to do is claim that they will attempt to raise the stock over time price or otherwise make shareholders happier. If many shareholders disagree, they can sue for mismanagement.

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

#259

Post by dahfizz »

qiskit wrote: post #114
jalonso510 wrote: post #104

Earlier quoted context omitted.

This is not correct. The board negotiated a deal with Elon after putting the poison pill into effect. If Elon had made a deal directly with the stockholders, that would have triggered the poison pill. He surely spoke with and lobbied the stockholders for support, but the deal he agreed to was approved by the board.

> The board negotiated a deal with Elon after putting the poison pill into effect. There was no "negotiation" with the board. Elon just made an unsolicited offer and said take it or leave it. The board "left it" and yet here we are. > If Elon had made a deal directly with the stockholders, that would have triggered the poison pill. What? That's not how poison pills work. Poison pills exist to prevent hostile takeover…

> The deal was first rejected by the board. And then the deal was approved by the board.

Source?? The deal was never rejected by the board. Instituting a poison pill was not a rejection. Twitter made it clear with the poison pill anouncement that they had not decided on Musks offer yet.

> The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders,” the company said in a press release.

> Twitter noted that the rights plan would not prevent the board from accepting an acquisition offer if the board deems it in the best interests of the company and its shareholders.

https://www.cnbc.com/2022/04/15/twitter-board-adopts-poison-...

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

#260

Post by lupire »

tptacek wrote: post #97

Nobody knows yet why the board relented, but the scuttlebutt seems to be that Twitter arranged an internal valuation once Musk put a price on the company, presumably as justification for an internal plan that they'd announce as their alternative to acquisition, and the valuation actually showed Musk was overpaying for the income Twitter was likely to generate. (If the board hadn't relented, Musk's next step would hav…

> was overpaying for the income Twitter was likely to generate.

This isn't a scientific fact, this is Management's guess. Management has been terrible at achieving long-term predicted income in the past.

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