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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?

#281

Post by resoluteteeth »

tptacek wrote: post #277
resoluteteeth wrote: post #265

Earlier quoted context omitted.

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

We're not talking about the share price, we're talking about the company's projected valuation.

The share price reflects the market's valuation of the company, and shareholders are not going to want to sell for a price less than the current share price plus a premium.

Maybe if the board had information that hadn't been published yet showing that the company's financials had completely tanked since the last earnings report it would be different, but other than that, Twitter's financials are obviously public, and even if the board used something like the DCF method and obtained a number much lower than the market cap, that has absolutely no bearing on whether they would accept a certain price from Musk.

So, no, it's really the share price that matters in this situation.

Also, even if you're purely talking about valuations, there are other common valuation methods like the comparable method that look at what similar companies have received based on their share price, so the idea that the board would decide to sell purely based on cashflow projections is not correct.

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

#282

Post by tempnow987 »

mrtesthah wrote: post #239
tempnow987 wrote: post #224

Earlier quoted context omitted.

Why are you getting down voted? I'm serious, it's weird. A lot of views here that board can do anything it wants, can destroy shareholder value through poison pills for political reasons etc. No. There were actually threats by pension funds in right wing states to come after twitter if they didn't do the deal and imploded it for political reasons. The downside to the stock from a) loss of offer, b) sale of musk share…

You keep posting this same statement over and over again -- it's starting to look like you're pushing an agenda. The truth is, that no, corporations do not have overriding fiduciary obligations to their shareholders in the simplistic way that you seem to be inferring. This cannot be legally enforced so expeditiously. You seem to be taking your position from youtube and political opinion pieces (e.g., reframing the vi…

The argument that board members can do what they want or do not have a fiduciary duty are so false its honestly not worth discussing further at this point.

The question of expeditious enforcement is a separate factor. Twitter is a Delaware corp so it's not as horrible as it would be elsewhere, but no question the enforcement side is less than ideal.

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

#283

Post by tptacek »

resoluteteeth wrote: post #281
tptacek wrote: post #277

Earlier quoted context omitted.

We're not talking about the share price, we're talking about the company's projected valuation.

The share price reflects the market's valuation of the company, and shareholders are not going to want to sell for a price less than the current share price plus a premium. Maybe if the board had information that hadn't been published yet showing that the company's financials had completely tanked since the last earnings report it would be different, but other than that, Twitter's financials are obviously public, and…

No, that's not true. The board's job is to determine how far off the share price is from what they believe the company is worth based on their own internal projections. The board is certainly not expected to take the spot price of Twitter common stock as the ground truth of the company's valuation.

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

#284

Post by tptacek »

smsm42 wrote: post #244
tptacek wrote: post #190

Earlier quoted context omitted.

The board could very easily have blown up the deal, which is proceeding only because they've consented to it. The game plan is simple: they do nothing, Musk executes a tender offer (which has a good chance of failing, so there's an out), the board says "nice job, but we're holding out for more money, check in with us next year", Musk launches a proxy fight, but it goes nowhere because Twitter has a staggered board an…

Technically they could, but once fiduciary duty is considered, and also given recent drops and maybe less than spectacular q1 results which as I understand are to come soon, they probably decided they shouldn't, as this may expose them to torches and pitchforks from shareholders that are less ideologically driven than they are. Yes, Musk's bid may be overpaying, but in that case board's duty is to grab the money - an…

Sure, we're saying the same thing in that regard.

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

#285

Post by mrtesthah »

tempnow987 wrote: post #282
mrtesthah wrote: post #239

Earlier quoted context omitted.

You keep posting this same statement over and over again -- it's starting to look like you're pushing an agenda. The truth is, that no, corporations do not have overriding fiduciary obligations to their shareholders in the simplistic way that you seem to be inferring. This cannot be legally enforced so expeditiously. You seem to be taking your position from youtube and political opinion pieces (e.g., reframing the vi…

The argument that board members can do what they want or do not have a fiduciary duty are so false its honestly not worth discussing further at this point. The question of expeditious enforcement is a separate factor. Twitter is a Delaware corp so it's not as horrible as it would be elsewhere, but no question the enforcement side is less than ideal.

Enforcement controls whether and to what extent they can do what they want. That’s the point.

Also, not sure what you mean by “ideal”. You seem to be assuming an unstated ethical frame there.

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

#286

Post by tempnow987 »

mrtesthah wrote: post #285
tempnow987 wrote: post #282

Earlier quoted context omitted.

The argument that board members can do what they want or do not have a fiduciary duty are so false its honestly not worth discussing further at this point. The question of expeditious enforcement is a separate factor. Twitter is a Delaware corp so it's not as horrible as it would be elsewhere, but no question the enforcement side is less than ideal.

Enforcement controls whether and to what extent they can do what they want. That’s the point. Also, not sure what you mean by “ideal”. You seem to be assuming an unstated ethical frame there.

I agree on enforcement.

What made this unique is that very early on there was relatively high profile interest from folks (DeSantis) who I'm guessing might try to make a point (they seem to be working towards a national profile vs just FL local). There is a naivete here that AG's offices are impartial in enforcement, they are often highly highly selective in enforcement efforts.

Securities litigation (broadly) has been going pretty strongly.

The parent comment I was engaging with had a substantive comment citing case law in this issue that at the time I commented was voted down.

Your article is also interesting.

My point was that this was trending towards a litmus test type political issue.

Elon was offering to let shareholders vote on the plan. Board was doing a) a poison pill, b) had a staggered board term setup, c) had the founder criticizing them, d) had some bumpy history and e) were faced with wading into an ugly political fight with poor optics given his offer.

So my own personal view is that Elon came with a surprising amount of leverage. What folks don't realize is that doing $43B deal at this speed is unusual.

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

#288

Post by twayt »

dang wrote: post #194
twayt wrote: post #172

Earlier quoted context omitted.

No calling an argument "utter nonsense" doesn't imply anything about the person making the argument. You may think it is ad hominem but technically it simply isn't since it isn't directed to a person but rather their argument. However, in this context, calling their argument "utter nonsense" is utterly unnecessary and only serves to up the ante.

It isn't just about being personal (though that's particularly bad). It's about not tossing in pejoratives and putdowns. The HN guidelines are clear about this: " When disagreeing, please reply to the argument instead of calling names. 'That is idiotic; 1 + 1 is 2, not 3' can be shortened to '1 + 1 is 2, not 3. " We don't want name-calling (in this sense) because it leads to dumber, nastier internet discussion. It's…

I think you misunderstood my comment. I agree with the spirit of the rule and hold a similar view to what you explained.

I was pointing out to the commenter that while it was not technically as hominem, it is still not acceptable and doesn’t add anything to the discussion.

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

#289

Post by twayt »

quickthrower2 wrote: post #207
twayt wrote: post #172

Earlier quoted context omitted.

No calling an argument "utter nonsense" doesn't imply anything about the person making the argument. You may think it is ad hominem but technically it simply isn't since it isn't directed to a person but rather their argument. However, in this context, calling their argument "utter nonsense" is utterly unnecessary and only serves to up the ante.

Good point (I might be replying to edited version?)

There is no edited version

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

#290

Post by am3101 »

The two biggest threads that seem to be coming out: 1- a number of large shareholders are on board 2- (probably related to the prior point) no one seriously thought Musk would be able to secure the financing, but he did. Remember, this is the guy who promised to do a take-private of Teslas with "funding secured" when it was very clear no such funding was secured. The Board, understandably, didn't want to waste time negotiating with Musk and said "show us the money"

This is a good piece (before Musk had secured the financing): https://www.bloomberg.com/opinion/articles/2022-04-20/elon-c...

> Another point I would make is that Twitter’s board is doing a decent job of (1) asking these questions and (2) forcing Musk to answer them. In a sense, launching a tender offer is a way for Musk to put pressure on the board to do a deal. But in another sense, forcing Musk to launch a tender offer is a way for the board to pressure him to find financing, which is a prerequisite to a deal and not something he would do on his own. In his own life, Musk is very casual about what counts as “funding secured,” as we know now from repeated experience. Writing a tender offer document will force him to be less casual.

> Broadly speaking, what has happened so far is (1) Musk offered the board $54.20 per share to buy Twitter, (2) the board said “show us the money,” and (3) Musk is working on it. If he comes up with the money, then the board will have to make some decisions, but right now the ball is in his court.

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