Elon Musk makes $43B unsolicited bid to take Twitter private • Hacker News Board

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#701

Post by RC_ITR » Thu, Apr 14, 2022, 5:10 PM UTC

DelaneyM wrote: post #691

gunapologist99 wrote: post #521

So Twitter was at $70 per share a year ago. So what? Jack Dorsey was CEO a year ago, too. The share price was $33 less than a month ago. But, despite an absolutely incredible roller-coaster news cycle, things have been definitely trending down at Twitter ($33/share last month), which was reflected in its share price. The current executive team (and Dorsey) had wasted time focusing on things that didn't matter instead…

Everyone currently holding $TWTR believes that the true value is greater than the current price. To make a successful hostile bid, you need to pay not just "more than the current price", but "more than the holders of 50% of current shares believe the company to be worth". Usually bidders use analyst price targets to guess at the distribution of holders' internal price targets. This is what makes it so difficult, and…

>Everyone currently holding $TWTR believes that the true value is greater than the current price.

This is not exactly true. Everyone holding Twitter believes that it will outperform the next best available asset. This can mean that it will decline less than cash (i.e. inflation) and decline less than other stocks. In our current market, this means people believe that Twitter has a good forward looking IRR, but it does not mean that all holders believe that the stock price should be $70.

>To make a successful hostile bid, you need to pay not just "more than the current price", but "more than the holders of 50% of current shares believe the company to be worth".

Again, this comes back to IRR terms. Sure Twitter may be worth $100/share ten years from now, but most people would take $50 today than $100 then.

>This is what makes it so difficult, and why this bid is very likely to be rejected.

The bid is likely to be rejected b/c it's likely made in bad faith. Read the SEC release and count how many times it says ' non-binding'

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#702

Post by CivBase » Thu, Apr 14, 2022, 5:11 PM UTC

babypuncher wrote: post #662

gunapologist99 wrote: post #521

So Twitter was at $70 per share a year ago. So what? Jack Dorsey was CEO a year ago, too. The share price was $33 less than a month ago. But, despite an absolutely incredible roller-coaster news cycle, things have been definitely trending down at Twitter ($33/share last month), which was reflected in its share price. The current executive team (and Dorsey) had wasted time focusing on things that didn't matter instead…

> Boards have a fiduciary duty to the shareholders. As an all-cash offer, this generates for the shareholders a substantial return with NO RISK, and so the board has a serious legal obligation to carefully review this offer and make a decision. The fact that their primary concern has to be for their shareholders and not whether the sale will be good at all for the rest of humanity is a huge problem in my eyes.

> The fact that their primary concern has to be for their shareholders and not whether the sale will be good at all for the rest of humanity is a huge problem in my eyes.

I know very little about public trading or the laws regarding it - especially compared to many other HN users - but here's my novice response:

Think about why that's a rule. The board doesn't own the company; the shareholders do. The board's role is to make decisions on behalf of the shareholders. The rule exists to ensure they do exactly that.

A board deciding to financially harm the investors they represent for the "good of humanity" goes against the very concept of investment. A public company intentionally acting against the financial interests of its owners would see its stock value immediately collapse, causing immense damage to its shareholders, employees, and customers.

If you want a company to act "for the good of humanity", it has to either be privately owned or align with the financial interests of its investors.

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#703

Post by chippiewill » Thu, Apr 14, 2022, 5:13 PM UTC

zwily wrote: post #517

molticrystal wrote: post #241

Just to verify that I understood the concept I looked up the definition of "hostile takeover" from various places, its common theme is taking over a company without approval of the board. The actual offer states [0]: >As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was pub…

That's correct - his offer is not hostile. If they reject it, he could attempt a hostile takeover by buying up enough stock to install his own board.

The offer is hostile because he made the offer at the same time he announced his intention to buy the company and he did it publicly.

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#704

Post by Vladimof » Thu, Apr 14, 2022, 5:16 PM UTC

How common are bids solicited?

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#705

Post by imbnwa » Thu, Apr 14, 2022, 5:16 PM UTC

dm319 wrote: post #643

This thread is hilarious. In the cesspit of a social media website, people accuse Twitter of being a social media cesspit. I've seen people arguing for absolute freedom of speech, except in malicious circumstances, but seem to think that malicious is easy to define. I've seen people ask if there really are any other alternatives to individuals owning huge wealth. Or people saying that doing immoral things is ok if it…

Don't forget the majority of comments in this very popular and reasonable thread [0]

[0]https://news.ycombinator.com/item?id=28087309&p=2

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#706

Post by x86_64Ubuntu » Thu, Apr 14, 2022, 5:20 PM UTC

dgudkov wrote: post #661

I bet some of those who advocated "it's a private company, it can deplatform whoever it wants" are probably re-thinking their stance on deplatforming from a major social media.

Not really. When moderation goes away, platforms become rife with racism, spam, scams and less than desirable actors. We've seen this with Gab and Parler.

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#707

Post by RaymondDeWitt » Thu, Apr 14, 2022, 5:20 PM UTC

babypuncher wrote: post #662

gunapologist99 wrote: post #521

So Twitter was at $70 per share a year ago. So what? Jack Dorsey was CEO a year ago, too. The share price was $33 less than a month ago. But, despite an absolutely incredible roller-coaster news cycle, things have been definitely trending down at Twitter ($33/share last month), which was reflected in its share price. The current executive team (and Dorsey) had wasted time focusing on things that didn't matter instead…

> Boards have a fiduciary duty to the shareholders. As an all-cash offer, this generates for the shareholders a substantial return with NO RISK, and so the board has a serious legal obligation to carefully review this offer and make a decision. The fact that their primary concern has to be for their shareholders and not whether the sale will be good at all for the rest of humanity is a huge problem in my eyes.

If someone offers to purchase your home or other property, the decision to accept that offer lay with the property owner(s), not the municipality, county, or state who may or may not consider impact to humanity. In what utopia do you think we live?

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#708

Post by zzleeper » Thu, Apr 14, 2022, 5:20 PM UTC

What's the chance of him just polling off a dogecoin? Price went up, he sells, then says "sorry for rejecting my offer" (which of course had "secured funding" and all that).

Would be a great way to make a few extra billion and of course the SEC won't do mcuh

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#709

Post by bewaretheirs » Thu, Apr 14, 2022, 5:22 PM UTC

jollybean wrote: post #645

"Boards have a fiduciary duty to the shareholders." Xi and the CCP/Chinese Government make a bid to buy Google, for a 20% premium. They also bid to buy Twitter, Facebook and Microsoft. All for 20% premium. Should shareholders do 'the right thing' and sell? Assuming you're not a Twitter shareholder why do you care about investors interests? Why don't you care about your interests ? Why do plebes constantly argue again…

"Xi and the CCP/Chinese Government make a bid to buy Google, for a 20% premium."

If this were to happen, the bid would be reviewed by the CFIUS -- https://home.treasury.gov/policy-issues/international/the-co... ; based on the review, the transaction could be blocked by executive order.

Re: Elon Musk makes $43B unsolicited bid to take Twitter private

#710

Post by kizer » Thu, Apr 14, 2022, 5:23 PM UTC

dgudkov wrote: post #661

I bet some of those who advocated "it's a private company, it can deplatform whoever it wants" are probably re-thinking their stance on deplatforming from a major social media.

Someone noted this in a thread on Reddit. Will be very funny to see the political spectrum reflect on this; suddenly many crying first amendment will be taking the position you quoted while some of those there now will may perhaps argue for Twitter to become a subsidiary of PBS (joking).