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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?

#261

Post by [deleted] »

diegoholiveira wrote: post #189
jmyeet wrote: post #137

Earlier quoted context omitted.

Sorry but this is utter nonsense. 51% of a company is not some magic ticket that allows you to do basically anything (including screwing the other 49%). It just doesn't work that way. There are certain thresholds that allow you to do more and more things but if you're in control of a company you still have a fiduciary duty to the other shareholders, even small minority shareholders. This is why minority shareholder l…

51% of valid votes is a magic number that allows you to do basically anything (including screwing the other 49%).

[deleted]

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

#262

Post by snake_doc »

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…

Absolutely incorrect, majority controlling stakes and full cash takeovers have different standards and requirements. Majority stakes usually require majority of the minority, which is not 51%.

https://www.lw.com/thoughtLeadership/the-latham-and-watkins-...

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

#263

Post by dahfizz »

It seems that many people considered the poison pill anouncment as a rejection of Musks offer. It was not. Here is a rough sequence of events:

Musks asks the board if he can buy Twitter.

The board institutes a poison pill to prevent any shenanigans while they consider the offer / to give them leverage.

The board decides to accept musk's offer. Musk did not have to do a hostile takeover by buying shares in the market, so the poison pill never triggered.

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

#264

Post by _8j50 »

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…

Wow, now this is great explanation.

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

#265

Post by resoluteteeth »

whatshisface wrote: post #218
tptacek wrote: post #196

Earlier quoted context omitted.

Sure, I'm not unbiased here and am framing this in the way least favorable to Musk --- that if a board is going to accept a first (=chuckle= no, "final") offer from a bidder, it's because the price is more than the board thinks the company is worth. But it's also true that they may have done that calculation quickly, and that really they were just making sure this wasn't an elaborate joke. Part of my analysis is base…

Musk probably had to overpay, otherwise they wouldn't want to sell it.

Of course. It is standard to pay a premium over the share price in this situation.

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

#266

Post by tmountain »

zwily wrote: post #165
krick wrote: post #155

Earlier quoted context omitted.

2. That doesn't answer my question. Actually, I'm not even sure how it attempted to. I specifically mentioned the "market price". I don't really know how these US congress persons work, and you may as well imply that the idea that they "represent" you is as much bullshit, as Musk-assigned board member represent real shareholders (and I have no problem with this implication), but there surely must be difference (and i…

There are stipulations that come with buying shares. In fact when you buy shares, they’re never even actually in your name. They’re like 3 steps removed from you via various holding companies that are basically a bunch of various crap. One of the stipulations of being a shareholder is that you may be forced to sell your shares under certain circumstances. Nothing illegal about it, even if you don’t like it.

Depends on where you buy. Most folks buy from a broker and are holding the “street name”, which is an abstraction of the actual stock; however, it is possible to directly register shares with the DTC (depository trust company) and actually own them.

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

#267

Post by inglor_cz »

jollybean wrote: post #71
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?

The poison pill is to make it so that the person can't ever get 51% because it's not good for everyone else. The 'short answer' to the question of 'why no poison pill' is simply because the Board reached some kind of agreement with Musk. I like Musk when he's in his lane, I don't see any good coming from this. Everyone is nuts to talk about 'shareholders' - who cares? As a 'consumer' - I want a good service and cheap…

"I want a good service and cheap (i.e. free) with no ads."

I feel this is unrealistic. What other services are good, free and ad-free? Very few. Someone has to pay for the development cost and the upkeep, and that someone will be calling the shots.

I much prefer a "democratic" system where as a customer I pay certain amount of money for using Twitter (say, 5 dollars a month) and get a vote on future changes to a system where I am a free "user / consumer" (and a product at the same time) and some shadowy entity manipulates everything it can to its own non-public purposes.

In order to turn just a little bit more civil, Twitter needs citizens, not users/consumers. And citizens usually have to pay some tax for the system to be sustainable.

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

#268

Post by mensetmanusman »

revicon wrote: post #184
ransom1538 wrote: post #135

Earlier quoted context omitted.

Pretty much. Your tdameritrade account will just update and stick cash into your account and explain what they did in the cost basis tab.

BTW, this is a taxable event where you might not have expected it to otherwise.

Hadn’t thought of that, this is a great way to force some taxation on billionaires who hold indefinitely!

I wonder if the federal government would ever purchase companies like this…

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

#269

Post by Msw242 »

strken wrote: post #232
liamwire wrote: post #178

Earlier quoted context omitted.

It seems you don’t understand the notion of conditional share ownership. These aren’t bearer bonds or cryptocurrency. Within the corporate structure that allowed you to be issued/sold these shares at the outset are stipulations that the board can liquidate your shares, under certain conditions. Evidently, those conditions have been met. An arbitrary definition of ‘fair’ doesn’t play into it.

I think the question is more to do with how we can have an economic system largely based on shares that can be rug-pulled from under a shareholder at any moment. How come governments don't legislate against it? How come anyone trusts shares enough to buy them? At a guess I'd say the answers to the two questions are "they do legislate against some behaviours, but blocking hostile takeovers is worse than allowing them"…

A healthy control premium over the market price for a publicly traded stock is a bit far and away from being "rugpulled"

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

#270

Post by KptMarchewa »

liamwire wrote: post #178
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…

It seems you don’t understand the notion of conditional share ownership. These aren’t bearer bonds or cryptocurrency. Within the corporate structure that allowed you to be issued/sold these shares at the outset are stipulations that the board can liquidate your shares, under certain conditions. Evidently, those conditions have been met. An arbitrary definition of ‘fair’ doesn’t play into it.

>Within the corporate structure that allowed you to be issued/sold these shares at the outset are stipulations that the board can liquidate your shares, under certain conditions.

Those conditions and corporate structures should be regulated way more thoroughly, preventing legal fuckery such as this. Or share classes.

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