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https://www.wsj.com/articles/how-elon-musk-won-twitter-11650...
freelink: https://www.wsj.com/articles/how-elon-musk-won-twitter-11650...
tldr:
- Making an offer without financing was a 4-D chess negotiating tactic
- Nobody else stepped in to buy it
- Musk was lining up support from other top shareholders
- Twitter's bankers told them it was a good deal
For the first time in a long time I am slightly optimistic about the future.
Anyway, I know the pundits are putting out face-savey type narrative. From my armchair over here, I’m seeing that the board had no choice but to sell.
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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"…
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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 o…
The board basically voted to stop standing in the way of the deal and submit it to shareholders themselves since they confirmed that A) it seems like an ok deal and B) it's likely to not waste everyone's time.
Earlier quoted context omitted.
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 o…
In this case, Reuters reported here https://www.reuters.com/technology/exclusive-twitter-set-acc... that the deal is subject to shareholders vote before it can be closed.
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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.
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Does anyone know if the terms were made more favourable to Twitter since the adoption of the Poison Pill?
I think that, as far as the public is aware, there weren't terms prior to the adoption of the poison pill. Musk bought a bunch of shares, and was looking to buy more. The poison pill was the board preemptively saying "we see what you're doing, and you have to go through us to accomplish it".
> Twitter adopted a limited duration shareholder rights plan, often called a “poison pill,” a day after billionaire Elon Musk offered to buy the company for $43 billion, the company announced Friday.
https://www.cnbc.com/2022/04/15/twitter-board-adopts-poison-...
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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"…
I think the problem is that a large number of people got used to various trading accounts like ETrade, Robin Hood, etc. and that seeing "N shares of ABC" on a web site means that they actually own the shares. But this is just an abstraction like someone said in another comment. I would encourage you to go and read any brokerage's terms of service that you agreed to when you signed up. Or if you actually managed to ge…
Earlier quoted context omitted.
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"