31–40 of 303 posts
can someone explain why you'd spend $210/share rather than just buy on the open market at ~$50/share now? Are the $210 shares better in some way? Why would the $210 price double?
Who is buying shares at $210?
The poison pill is the name of a corporate strategy that prevents Elon from just buying 50% of the shares in the stock market and doing whatever he wants. It doesn't mean the same thing as the board saying they would rather swallow poison than deal with Musk. Therefore, the board engaging with his bid to buy twitter, and the two of them only negotiating that way, was the goal. So it's not a 180. The board was origina…
I think it was more than just they didn't believe Elon had trouble raising the cash. They liked being in control of Twitter and getting easy money as board members, and didn't realise that they can get personally liable for billions of dollars of loss for shareholders and go to court for years if they don't at least consider the offer and seriously evaluate whether the offer is worth taking for Twitter shareholders o…
It is ludicrous to believe that, even if this were true BEFORE the Musk bid came in, they were not consulting with corporate counsel AFTER and in conjunction with issuing the poison pill.
As others have said, it is frequently used as a negotiating tactic and will usually pop up somewhere along the way in any unsolicited takeover situation. Just like the simple act of saying "no" is often a negotiating tactic and not a true statement of someone's unwavering intent.
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 remain in power.
But that won't work if the offer is good enough that the existing shareholders want to take it. Then the poison pill becomes something the shareholders don't like, because it prevented them from doing what they want. Depending on how badly the existing shareholders wanted the offer, the board may not remain in power that way either.
Note well: There may be details in the way all this went down that don't fit in my cynical little narrative. But absent knowledge of those details, this is my suspicion of what's really driving the poison pill.
Earlier quoted context omitted.
Who is buying shares at $210?
It's a bit confusing; it's not $210 a share, but that was the exercise price for the poison pill bonus shares. https://twitter.com/matt_levine/status/1516047634812833799
„Things that must be true if Twitter’s board is ready to accept @elonmusk’s offer:
1) they did a soft market check and there were no other bidders.
2) @Jack is on board.
3) the pressure campaign worked.“ (cont.)
https://twitter.com/davidsacks/status/1518623080557342720?s=...
The idea of the ”poison pill” is to make it possible for board members to strenghten their ownership by issuing new shares to existing owners with a discount in the event that one single outside entity buys a significant portion of the shares. It is artificial dilution, which in practice makes it possible for the board to cause heavy short-term losses to anyone attempting a hostile takeover: the market reaction to di…
This poison pill does not strengthen Twitter board members' ownership because they don't own much Twitter stock.
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 actually care about the fate of the company, they just don’t want to lose money.
He secured financing for the deal.
Earlier quoted context omitted.
It's a bit confusing; it's not $210 a share, but that was the exercise price for the poison pill bonus shares. https://twitter.com/matt_levine/status/1516047634812833799
so if they buy it at $210, but can sell it at $420? who buys it at $420? Twitter?
Functionally, a stock split for everyone but Musk. Hence, poison pill.