8 ms·

Stockholder Proposal Regarding a Report on Users Owning the Twitter Platform

235 points by andruby 9y ago

deleted 9y ago
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la_oveja 9y ago
Is this actually happening? In legal terms, what does it mean?
- deleted 9y ago
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- ar0 9y ago
  No, it's not. This is just a proxy statement, meaning it includes all proposals shareholders will be asked to vote on at Twitter's next annual meeting (on May 22nd). Everyone can submit shareholder proposals who owns at least 2000$ of stock [1]. This does not mean that anything will actually happen: The board of Twitter recommends voting AGAINST the proposal and I doubt large institutional investors will vote against the board on this, so the measure will most likely fail. And even in the quite unlikely case the measure would be approved, it is only asking for a "report" on what selling Twitter to its users would mean. It does not argue for such a sale to actually take place. [1]: http://theshareholderactivist.com/shareholder-activism-spotlight/what-is-a-shareholder-proposal/ http://theshareholderactivist.com/shareholder-activism-spotl...
  - TallGuyShort 9y ago
    And this is really just being considered from the perspective of what Twitter being sold to users means for Twitter shareholders. What about what that means for Twitter's users? Will using Twitter require having to purchase a share of stock on a public exchange? I think it's a pretty bad idea all-around. Unless they're incredibly smart about this (not even sure it's possible to figure out), all of a sudden dilution of Twitter stock is linked with adoption, and voting rights are linked with number of Twitter accounts, and having a Twitter account is linked with ability to purchase stock which is not exactly an anonymous, private thing.
    - SomeStupidPoint 9y ago
      Credit unions have a decent handle on customers-as-owners, so it's not completely without precedent from a business standpoint. My biggest issue is your last point, where owning an account would likely involve "Know Your Customer" levels of identity proving. It would likely require a new class of shares or going private, rather than buying a share on an exchange. Similarly, you'd likely only get one share no matter the number of accounts (using KYC information to de-dup, or having two notions a "member" who can have multiple "personas"). I don't know that it's a good idea for Twitter, but it's at least a (sort of) legally workable idea for an authenticated messaging platform in the abstract. If I were starting a new Twitter, I'd consider it.
- deleted 9y ago
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- cowsandmilk 9y ago
  In legal terms, someone filed a shareholder proposal and the board was not able to prevent it from being voted on. I cannot imagine the shareholders would approve this.
- mbesto 9y ago
  Read this -> https://news.ycombinator.com/item?id=14080212 https://news.ycombinator.com/item?id=14080212
jerf 9y ago
I feel like I'm missing some "between the lines" stuff, like, is this some sort of velvet-gloved veiled takeover attempt? I'm not saying that's what this is, but it seems like there's more than meets the eye here. Is there anybody with experience who might be able to comment on that? Either way it seems related to the fact that this probably wouldn't be getting discussed if the stock was doing well.
- ath0 9y ago
  Shareholders are allowed to propose items that will appear on the ballot for annual vote, "(1) In order to be eligible to submit a proposal, you must have continuously held at least $2,000 in market value, or 1%, of the company's securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal." https://www.law.cornell.edu/cfr/text/17/240.14a-8 https://www.law.cornell.edu/cfr/text/17/240.14a-8 Before shareholders vote on the proposal, the board of directors can make a recommendation - is this a good idea or a bad idea? In this case, they say: bad idea. Shareholders aren't bound to agree with the board, but usually do - after all, they're the same folks who nominated the board in the first place.
  - jerf 9y ago
    So, "some person" of no particular power within Twitter (given how easy it is to own $2K of Twitter stock for a year) got a ballot proposal on the ballot for what could be read as more-or-less personal/ideological reasons as much as a serious proposal? In which case, this sort of thing happens all the time and this is only HN news because it's Twitter? (Checking my guess/understanding. And I'm not upset that it's HN news or something, that's fine; just trying to calibrate my understanding, as my initial calibration was perhaps too oversensitive.)
    - JoshTriplett 9y ago
      > In which case, this sort of thing happens all the time and this is only HN news because it's Twitter? Yes, this sort of thing happens all the time. If you own some shares of an individual company (not through a fund), you'll get notice periodically of items to be voted on: proposals from the board (often routine such as handling accounting and audits), which the board recommends passing and which almost always pass, and proposals from individual shareholders, which the board almost always recommends against and which almost always fail. Many of them are ideological, some more reasonable than others. Does anyone know of any prominent case where a major company passed a shareholder proposal? And/or the board recommended in favor of one?
mentaat 9y ago
why doesn't google just buy the damn thing?
kylehotchkiss 9y ago
Let's say a large percentage of people who don't exactly support the current governments use of twitter buy up some twitter ownership. Can we then politely ask him to communicate to American citizens via different mediums?
- Sir_Cmpwn 9y ago
  Are you serious? This isn't necessary or relevant.
  - deleted 9y ago
    [deleted]
  - cwperkins 9y ago
    I think this is completely relevant. I think a company should be able to moderate it's own content based on what it deems acceptable for it's community. This is a totally valid question and something I believe is worth discussing as we have gone well beyond absurdity at this point. Edit: Disclosure, I am a twitter shareholder and approve the ban of @realDonaldTrump from twitter unless the "libel" and McCarthy type posts are removed and any accusations as such are filed in proper mediums.
    - cmurf 9y ago
      There is something to be said though about shining a spotlight on the cockroach infestation, rather than filling the holes with spackle followed by a nice paint job. Threats of violence, or calls that encourage it are a fair line to draw for any user. But the posts you're talking about removing, I think amounts to turd polishing that might actually make it sparkle more than it deserves, and ends up being a deception of the true character of the person. Imagine if all the birtherism posts were scrubbed? That's his true nature. Compulsive liar or delusional - doesn't really matter. My concern is assurance posts are difficult to scrub. That's what incentivizes people to be sincere rather than just taking inconsequential pot shots at others.
- joezydeco 9y ago
deleted 9y ago
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jbeales 9y ago
This is a stockholder recommendation and the Board of Directors is recommending [1] that stockholders vote against it, so it's likely dead in the water. The headline "to discuss" is a probably overstating what will actually happen. A similar situation has happened the last couple of years with Apple, where there's a shareholder proposal for greater diversity[2], and it gets clobbered at the meeting. [1] https://www.sec.gov/Archives/edgar/data/1418091/000119312517116229/d319969ddef14a.htm#toc319969_1 https://www.sec.gov/Archives/edgar/data/1418091/000119312517... [2]http://www.businessinsider.com/apple-diversity-shareholder-proposal-2017-2 http://www.businessinsider.com/apple-diversity-shareholder-p...
- anigbrowl 9y ago
  Well nothing is going to change until people start telling boards of directors to go fuck themselves. Nominally BoDs are fiduciaries but frankly that doesn't mean much these days, and directors have every incentive to preserve the status quo rather than engage in any kind of innovation as regards corporate structure. In this the BoD has no more privileged insight than any of the shareholders and should be ignored. There's no guarantee it will make Twitter profitable but there's the potential to enrich the public without the shareholders being measurably worse off.
  - harryh 9y ago
    there's the potential to enrich the public without the shareholders being measurably worse off Right now the shareholders collectively own something worth 10 billion dollars. That's quite a bit of money. Giving it away to the users would make them measurably worse off.
    - rch 9y ago
      It's not given away, it's purchased. The shareholders just need to agree to equitable terms. New Belgium was advised by Eureka Capital Markets, a middle market investment-banking firm: http://www.newbelgium.com/community/Blog/new-belgium-brewing/2013/01/16/We-are-100-Employee-Owned http://www.newbelgium.com/community/Blog/new-belgium-brewing...
sctb 9y ago
We've updated the title from “Twitter to discuss proposal to sell itself to users”.
grondilu 9y ago
This reminds me of when people claim it'd be better if a company was owned by its employees. This idea influences businesses to various degrees, from stock options to cooperatives. IMHO, this idea fails to acknowledge that ownership is a dynamic concept, not a static one. In a free country, people can sell what they own. So even if you give shares to a category of person you think should own them, you don't know if they will keep them or if they will sell them to the very category of people you took these shares from in the first place.
- inimino 9y ago
  The idea that the difference between people with capital and without is one of preference seems rather bizarre.
  - grondilu 9y ago
    Some people prefer cash to share holdings. It is, by all means, a preference.
    - naravara 9y ago
      Some people would prefer holdings in lieu of cash, but prefer being able to eat and pay rent in lieu of holdings so they wind up taking the cash. That too is, technically, a preference but let's not pretend all "preferences" have no more weight or societal implication than what flavor of ice-cream we like.
      - grondilu 9y ago
        You seem to believe that people don't own capital because they are poor or something. It is certainly true that poor people don't own capital, but it is also probably true that a lot of people who are not poor do not own capital either. For instance, I suppose that socialistic-minded people don't, and yet I doubt they are all poor. In any case, the preference I was talking about was excluding wealth considerations. All other things being equal, the tendency to hoard capital is, I believe, part of character.
sailfast 9y ago
For folks wondering about whether this will happen, I would highly recommend also reading the Board's "Statement of Opposition." Pretty clear no. Shareholder value, etc. While this might be a decent option for a medium that could be considered important for public discourse, it's certainly not going to goose your stock price and I'm guessing even every Twitter user contributing a few bucks won't get you to a sale price that might work for the board.
- naravara 9y ago
  > I would highly recommend also reading the Board's "Statement of Opposition." Pretty clear no. Shareholder value, etc. While I agree there is no shareholder value involved, I think there is some scope for thinking of the platform as a public utility and putting it under some framework other than a publicly traded corporation. It could operate either as a Foundation, a Public-private partnership, a federal agency perhaps as a subsidiary of the Library of Congress, or some other system of governance that makes it operate more as a public trust than a corporation. It's function is definitely more akin to a public utility than a product produced for market, after all, so why not? I'd say most online stuff still has too many returns to innovation to where the opportunity costs of nationalizing them outweigh the benefits. But clearly Twitter isn't doing a great job of staying afloat as it is.
  - sailfast 9y ago
    I agree that from a societal value perspective this argument exists, but if I were someone concerned with the overall market cap / share price value of the company in dollars I would likely not want to see that happen in the near term in the hopes that other options might garner greater value on the open market.
    - WorldMaker 9y ago
      Kickstarter's reincorporation as a (New York) Public Benefit Corporation (PBC) is an interesting precedent in this space. https://en.wikipedia.org/wiki/Public-benefit_corporation https://en.wikipedia.org/wiki/Public-benefit_corporation
bplatta 9y ago
The board's statement of opposition pretty cleanly argues against this type of equity overhaul. That said, I do appreciate the spirit of the proposal. Specifically, how do users that are contributing to the value of the network somehow extract some of that value in real terms? Of course, there's a lot of complexity to that sort of system and the cost of implementing it substantial. But whereas some people are working on architecting that sort of system from the outset as more a technical feat, this tact would get legal momentum that would almost guarantee some sort solution, be it good, bad or more likely, somewhere in between.
- djrogers 9y ago
  > how do users that are contributing to the value of the network somehow extract some of that value in real terms? If users aren't getting any value out of using the service, they won't use it. The fact that they are using it, without any force or coercion, indicates there is sufficient value being extracted from the service by it's users.
maverick_iceman 9y ago
As a Twitter stockholder, how do I get to vote against this?
- maxlybbert 9y ago
  In practice, it's a little convoluted ( https://www.bloomberg.com/view/articles/2016-05-13/t-rowe-price-voted-for-the-dell-buyout-by-accident https://www.bloomberg.com/view/articles/2016-05-13/t-rowe-pr... , that story is about takeover bids, but I'm sure the process is similar). Occasionally, I get postcards asking me to nominate a proxy for some upcoming shareholders meeting due to investments I own through my 401(k). I guess that you should be on the lookout for that kind of postcard and follow the instructions.
- zardo 9y ago
  Do nothing. The board doesn't back it, and they get your vote if you don't bother.
- omarforgotpwd 9y ago
  If you use a brokerage like Ameritrade or Robinhood usually they'll just email you your proxy so you can vote on it.
bluetwo 9y ago
Their examples of other organizations that are largely owned by their employees skips the fact that these other organizations have great leadership, who in turn foster commitment by spreading around the wealth. Simply spreading around shares of the company won't make great leadership magically appear at Twitter. That's backwards thinking.
riffic 9y ago
haha. Twitter is not a public utility. If you represent an organization and you need to control your social infrastructure, you need to self-manage that infrastructure. Getting involved in the development of GNU social or Mastodon would be a great start.
Animats 9y ago
The question is whether Twitter's board is going to try to ride it all the way down to the bankruptcy. Twitter loses money. $167m last quarter. Twitter has lost money for 10 years. Revenue is flat. They're not a growth company any more. There's no sign of a turnaround. This is when the board has to consider firing the CEO, and the stockholders have to consider firing the board.
- astrange 9y ago
  Someone working at Twitter told me they're losing money due to paying off earlier employees' equity grants rather than cost of operation. Continuing to run the company for growth will probably ruin it, since nobody has any good ideas except continuing to turn it into Facebook. (IMO this is the problem with starting your big company in SF - you'll just get employees who leave your competitors and think the same way they do.)
  - deleted 9y ago
    [deleted]
  - ng12 9y ago
    That's ridiculous. California is at-will through and through. If paying a subset of their employees was the biggest problem it'd be an easy one to solve.
    - cestith 9y ago
      Paying an equity grant isn't the same as continuing to employ someone and continuing to pay their salary. If someone has an equity grant, that's already a liability to be paid. "At will" refers to ongoing employment, not paying existing liabilities.
      - ng12 9y ago
        I'm not sure what you mean by "paying an equity grant". If you fire someone they no longer receive new equity. And for a company that's been public for 4 years with a constantly dropping stock price I doubt the volume of early employees exercising options could possibly bankrupt the company. I don't understand how that could happen to any reasonably well managed company.
wffurr 9y ago
I kind of want to buy some Twitter stock just so I can vote for this proposal. Shame the board lacks vision beyond "maximize shareholder value". Yes yes, fiduciary duty, etc. etc. There's more to life than the value of your stock.
- nathancahill 9y ago
  You'd need to have bought it before the record date though.
- mixedCase 9y ago
  > Yes yes, fiduciary duty, etc. etc. There's more to life than the value of your stock. You don't see the contradiction in this statement?
- ruleabidinguser 9y ago
  I think this is an unfair criticism. Theyre not in the business of charity.
davesque 9y ago
Regardless of how likely this would be to move forward, I have to say that I can't imagine a user-owned Twitter being much of a good thing. I'm pretty sure it would just devolve further into a platform for crap-flinging.
alphonsegaston 9y ago
I think the first social media network that succeeds in democratizing ownership of the platform will spread like wildfire and overtake incumbents. Everyone is already being primed for app-driven direct democracy through social media channels, so the moment this is made real, it will explode in popularity. The technical challenges for creating clones of existing services are solved problems, so all it will take is the social will.
MichaelGG 9y ago
Maybe I'm slow but am I the only one not getting the point of this at all? Users can already be owners by buying stock. And what exactly is the benefit? Random Twitter users are somehow gonna come up with plans on how to make the company profitable (heh how many "monthly fee" proposals will be submitted?)? Are there examples of large companies converting into a credit union type model? Why would shareolders want this?
- wbillingsley 9y ago
  Its worked quite well in a number of areas -- it tends to be good for sustainable growth, rather than adventurism, as the owners are concerned more about keeping the company sustainable and healthy than rapid growth. And the feel-good factor of it being a community organisation means people like to give it their custom. John Lewis, one of the UK's largest retailers (annual turnover about £10bn) with one of the best-respected brand is employee-owned under a cooperative structure. In terms of rescuing businesses from big egos doing badly, Portsmouth FC was rescued by a fan take-over after a number of disastrous owners who'd saddled the club with debt and left it on the verge of liquidation. It's now on a healthier footing and starting the climb back up the leagues. For Twitter, which was in a strong position to become a social utility, it's probably not a bad model. But it doesn't involve going out in a blaze of glory, so executives will hate it.
wkoszek 9y ago
It'd be much better of if each Twitter user would become a verified user and pay $1/yr for normal plan with let's say notifications about posts/replies, $6/yr for read/write access and $12/yr for some premium plan. Maybe that'd make Twitter better off financially and better platform in general. Each time I post something from my blog here I get natural organic comments etc.. Each time I post on Twitter, I get some bots following me, retweeting and others. I'd much rather pay and know there is real life there.
- foxylad 9y ago
  I agree. I've always been non-plussed at Twitter's valuation, given the lack of a clear monetization scheme, but then so many early unicorns were the same - eyeballs were the primary goal, with vague assumptions that revenue will automatically follow. And I agree that if you had to pay (I'd go for a dollar a month) to tweet, it would cure many of Twitter's ills. Bots, scams and fake news would pretty much disappear overnight.
  - dmoy 9y ago
    The worry is probably that most of their userbase would also disappear overnight...
EternalData 9y ago
Douglas Rushkoff wrote decently well about this topic -- his argument was that Twitter was a company that never should have gone public and which would have been much more interesting had it been more decentralized and privately controlled. Maybe not as interesting financially -- but interesting in the sense of control and technological vision. Public markets can do all sorts of strange things to a company -- I think as IPOs start to wane in frequency, a lot of startups are going to take a long hard look at public markets and some might decide to take a hard pass on them, despite the gold pot at the end of the rainbow.
- grogenaut 9y ago
  Had they not brought in a bunch of good engineers with the lure of IPO, they would likely still be at the fail whale state.
srisa 9y ago
To go slightly off tangent, will it make sense for Twitter to enter into the micro payments landscape? All (almost?) bloggers, people working on open source projects have twitter account; even if they don't have one, creating one is easy. Donors can get some kind of acknowledgement on their (and receivers) twitter feed and the content creators will get some money.
PeterStuer 9y ago
I'm not going one way or the other, but just want to remark that 'you can already buy shares' isn't a correct response to a call for democratic ownership. Typically in the latter you have the notion of one user/one vote, while in the former model you get as many votes as you can buy.

235 points by andruby 9y ago

deleted 9y ago

[deleted]

la_oveja 9y ago

Is this actually happening? In legal terms, what does it mean?

deleted 9y ago
[deleted]
ar0 9y ago
No, it's not. This is just a proxy statement, meaning it includes all proposals shareholders will be asked to vote on at Twitter's next annual meeting (on May 22nd). Everyone can submit shareholder proposals who owns at least 2000$ of stock [1]. This does not mean that anything will actually happen: The board of Twitter recommends voting AGAINST the proposal and I doubt large institutional investors will vote against the board on this, so the measure will most likely fail. And even in the quite unlikely case the measure would be approved, it is only asking for a "report" on what selling Twitter to its users would mean. It does not argue for such a sale to actually take place. [1]: http://theshareholderactivist.com/shareholder-activism-spotlight/what-is-a-shareholder-proposal/ http://theshareholderactivist.com/shareholder-activism-spotl...
- TallGuyShort 9y ago
  And this is really just being considered from the perspective of what Twitter being sold to users means for Twitter shareholders. What about what that means for Twitter's users? Will using Twitter require having to purchase a share of stock on a public exchange? I think it's a pretty bad idea all-around. Unless they're incredibly smart about this (not even sure it's possible to figure out), all of a sudden dilution of Twitter stock is linked with adoption, and voting rights are linked with number of Twitter accounts, and having a Twitter account is linked with ability to purchase stock which is not exactly an anonymous, private thing.
  - SomeStupidPoint 9y ago
    Credit unions have a decent handle on customers-as-owners, so it's not completely without precedent from a business standpoint. My biggest issue is your last point, where owning an account would likely involve "Know Your Customer" levels of identity proving. It would likely require a new class of shares or going private, rather than buying a share on an exchange. Similarly, you'd likely only get one share no matter the number of accounts (using KYC information to de-dup, or having two notions a "member" who can have multiple "personas"). I don't know that it's a good idea for Twitter, but it's at least a (sort of) legally workable idea for an authenticated messaging platform in the abstract. If I were starting a new Twitter, I'd consider it.
deleted 9y ago
[deleted]
cowsandmilk 9y ago
In legal terms, someone filed a shareholder proposal and the board was not able to prevent it from being voted on. I cannot imagine the shareholders would approve this.
mbesto 9y ago
Read this -> https://news.ycombinator.com/item?id=14080212 https://news.ycombinator.com/item?id=14080212

jerf 9y ago

I feel like I'm missing some "between the lines" stuff, like, is this some sort of velvet-gloved veiled takeover attempt? I'm not saying that's what this is, but it seems like there's more than meets the eye here. Is there anybody with experience who might be able to comment on that? Either way it seems related to the fact that this probably wouldn't be getting discussed if the stock was doing well.

ath0 9y ago
Shareholders are allowed to propose items that will appear on the ballot for annual vote, "(1) In order to be eligible to submit a proposal, you must have continuously held at least $2,000 in market value, or 1%, of the company's securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal." https://www.law.cornell.edu/cfr/text/17/240.14a-8 https://www.law.cornell.edu/cfr/text/17/240.14a-8 Before shareholders vote on the proposal, the board of directors can make a recommendation - is this a good idea or a bad idea? In this case, they say: bad idea. Shareholders aren't bound to agree with the board, but usually do - after all, they're the same folks who nominated the board in the first place.
- jerf 9y ago
  So, "some person" of no particular power within Twitter (given how easy it is to own $2K of Twitter stock for a year) got a ballot proposal on the ballot for what could be read as more-or-less personal/ideological reasons as much as a serious proposal? In which case, this sort of thing happens all the time and this is only HN news because it's Twitter? (Checking my guess/understanding. And I'm not upset that it's HN news or something, that's fine; just trying to calibrate my understanding, as my initial calibration was perhaps too oversensitive.)
  - JoshTriplett 9y ago
    > In which case, this sort of thing happens all the time and this is only HN news because it's Twitter? Yes, this sort of thing happens all the time. If you own some shares of an individual company (not through a fund), you'll get notice periodically of items to be voted on: proposals from the board (often routine such as handling accounting and audits), which the board recommends passing and which almost always pass, and proposals from individual shareholders, which the board almost always recommends against and which almost always fail. Many of them are ideological, some more reasonable than others. Does anyone know of any prominent case where a major company passed a shareholder proposal? And/or the board recommended in favor of one?

mentaat 9y ago

why doesn't google just buy the damn thing?

kylehotchkiss 9y ago

Let's say a large percentage of people who don't exactly support the current governments use of twitter buy up some twitter ownership. Can we then politely ask him to communicate to American citizens via different mediums?

Sir_Cmpwn 9y ago
Are you serious? This isn't necessary or relevant.
- deleted 9y ago
  [deleted]
- cwperkins 9y ago
  I think this is completely relevant. I think a company should be able to moderate it's own content based on what it deems acceptable for it's community. This is a totally valid question and something I believe is worth discussing as we have gone well beyond absurdity at this point. Edit: Disclosure, I am a twitter shareholder and approve the ban of @realDonaldTrump from twitter unless the "libel" and McCarthy type posts are removed and any accusations as such are filed in proper mediums.
  - cmurf 9y ago
    There is something to be said though about shining a spotlight on the cockroach infestation, rather than filling the holes with spackle followed by a nice paint job. Threats of violence, or calls that encourage it are a fair line to draw for any user. But the posts you're talking about removing, I think amounts to turd polishing that might actually make it sparkle more than it deserves, and ends up being a deception of the true character of the person. Imagine if all the birtherism posts were scrubbed? That's his true nature. Compulsive liar or delusional - doesn't really matter. My concern is assurance posts are difficult to scrub. That's what incentivizes people to be sincere rather than just taking inconsequential pot shots at others.
joezydeco 9y ago

deleted 9y ago

[deleted]

jbeales 9y ago

This is a stockholder recommendation and the Board of Directors is recommending [1] that stockholders vote against it, so it's likely dead in the water. The headline "to discuss" is a probably overstating what will actually happen. A similar situation has happened the last couple of years with Apple, where there's a shareholder proposal for greater diversity[2], and it gets clobbered at the meeting. [1] https://www.sec.gov/Archives/edgar/data/1418091/000119312517116229/d319969ddef14a.htm#toc319969_1 https://www.sec.gov/Archives/edgar/data/1418091/000119312517... [2]http://www.businessinsider.com/apple-diversity-shareholder-proposal-2017-2 http://www.businessinsider.com/apple-diversity-shareholder-p...

anigbrowl 9y ago
Well nothing is going to change until people start telling boards of directors to go fuck themselves. Nominally BoDs are fiduciaries but frankly that doesn't mean much these days, and directors have every incentive to preserve the status quo rather than engage in any kind of innovation as regards corporate structure. In this the BoD has no more privileged insight than any of the shareholders and should be ignored. There's no guarantee it will make Twitter profitable but there's the potential to enrich the public without the shareholders being measurably worse off.
- harryh 9y ago
  there's the potential to enrich the public without the shareholders being measurably worse off Right now the shareholders collectively own something worth 10 billion dollars. That's quite a bit of money. Giving it away to the users would make them measurably worse off.
  - rch 9y ago
    It's not given away, it's purchased. The shareholders just need to agree to equitable terms. New Belgium was advised by Eureka Capital Markets, a middle market investment-banking firm: http://www.newbelgium.com/community/Blog/new-belgium-brewing/2013/01/16/We-are-100-Employee-Owned http://www.newbelgium.com/community/Blog/new-belgium-brewing...

sctb 9y ago

We've updated the title from “Twitter to discuss proposal to sell itself to users”.

grondilu 9y ago

This reminds me of when people claim it'd be better if a company was owned by its employees. This idea influences businesses to various degrees, from stock options to cooperatives. IMHO, this idea fails to acknowledge that ownership is a dynamic concept, not a static one. In a free country, people can sell what they own. So even if you give shares to a category of person you think should own them, you don't know if they will keep them or if they will sell them to the very category of people you took these shares from in the first place.

inimino 9y ago
The idea that the difference between people with capital and without is one of preference seems rather bizarre.
- grondilu 9y ago
  Some people prefer cash to share holdings. It is, by all means, a preference.
  - naravara 9y ago
    Some people would prefer holdings in lieu of cash, but prefer being able to eat and pay rent in lieu of holdings so they wind up taking the cash. That too is, technically, a preference but let's not pretend all "preferences" have no more weight or societal implication than what flavor of ice-cream we like.
    - grondilu 9y ago
      You seem to believe that people don't own capital because they are poor or something. It is certainly true that poor people don't own capital, but it is also probably true that a lot of people who are not poor do not own capital either. For instance, I suppose that socialistic-minded people don't, and yet I doubt they are all poor. In any case, the preference I was talking about was excluding wealth considerations. All other things being equal, the tendency to hoard capital is, I believe, part of character.

sailfast 9y ago

For folks wondering about whether this will happen, I would highly recommend also reading the Board's "Statement of Opposition." Pretty clear no. Shareholder value, etc. While this might be a decent option for a medium that could be considered important for public discourse, it's certainly not going to goose your stock price and I'm guessing even every Twitter user contributing a few bucks won't get you to a sale price that might work for the board.

naravara 9y ago
> I would highly recommend also reading the Board's "Statement of Opposition." Pretty clear no. Shareholder value, etc. While I agree there is no shareholder value involved, I think there is some scope for thinking of the platform as a public utility and putting it under some framework other than a publicly traded corporation. It could operate either as a Foundation, a Public-private partnership, a federal agency perhaps as a subsidiary of the Library of Congress, or some other system of governance that makes it operate more as a public trust than a corporation. It's function is definitely more akin to a public utility than a product produced for market, after all, so why not? I'd say most online stuff still has too many returns to innovation to where the opportunity costs of nationalizing them outweigh the benefits. But clearly Twitter isn't doing a great job of staying afloat as it is.
- sailfast 9y ago
  I agree that from a societal value perspective this argument exists, but if I were someone concerned with the overall market cap / share price value of the company in dollars I would likely not want to see that happen in the near term in the hopes that other options might garner greater value on the open market.
  - WorldMaker 9y ago
    Kickstarter's reincorporation as a (New York) Public Benefit Corporation (PBC) is an interesting precedent in this space. https://en.wikipedia.org/wiki/Public-benefit_corporation https://en.wikipedia.org/wiki/Public-benefit_corporation

bplatta 9y ago

The board's statement of opposition pretty cleanly argues against this type of equity overhaul. That said, I do appreciate the spirit of the proposal. Specifically, how do users that are contributing to the value of the network somehow extract some of that value in real terms? Of course, there's a lot of complexity to that sort of system and the cost of implementing it substantial. But whereas some people are working on architecting that sort of system from the outset as more a technical feat, this tact would get legal momentum that would almost guarantee some sort solution, be it good, bad or more likely, somewhere in between.

djrogers 9y ago
> how do users that are contributing to the value of the network somehow extract some of that value in real terms? If users aren't getting any value out of using the service, they won't use it. The fact that they are using it, without any force or coercion, indicates there is sufficient value being extracted from the service by it's users.

maverick_iceman 9y ago

As a Twitter stockholder, how do I get to vote against this?

maxlybbert 9y ago
In practice, it's a little convoluted ( https://www.bloomberg.com/view/articles/2016-05-13/t-rowe-price-voted-for-the-dell-buyout-by-accident https://www.bloomberg.com/view/articles/2016-05-13/t-rowe-pr... , that story is about takeover bids, but I'm sure the process is similar). Occasionally, I get postcards asking me to nominate a proxy for some upcoming shareholders meeting due to investments I own through my 401(k). I guess that you should be on the lookout for that kind of postcard and follow the instructions.
zardo 9y ago
Do nothing. The board doesn't back it, and they get your vote if you don't bother.
omarforgotpwd 9y ago
If you use a brokerage like Ameritrade or Robinhood usually they'll just email you your proxy so you can vote on it.

bluetwo 9y ago

Their examples of other organizations that are largely owned by their employees skips the fact that these other organizations have great leadership, who in turn foster commitment by spreading around the wealth. Simply spreading around shares of the company won't make great leadership magically appear at Twitter. That's backwards thinking.

riffic 9y ago

haha. Twitter is not a public utility. If you represent an organization and you need to control your social infrastructure, you need to self-manage that infrastructure. Getting involved in the development of GNU social or Mastodon would be a great start.

Animats 9y ago

The question is whether Twitter's board is going to try to ride it all the way down to the bankruptcy. Twitter loses money. $167m last quarter. Twitter has lost money for 10 years. Revenue is flat. They're not a growth company any more. There's no sign of a turnaround. This is when the board has to consider firing the CEO, and the stockholders have to consider firing the board.

astrange 9y ago
Someone working at Twitter told me they're losing money due to paying off earlier employees' equity grants rather than cost of operation. Continuing to run the company for growth will probably ruin it, since nobody has any good ideas except continuing to turn it into Facebook. (IMO this is the problem with starting your big company in SF - you'll just get employees who leave your competitors and think the same way they do.)
- deleted 9y ago
  [deleted]
- ng12 9y ago
  That's ridiculous. California is at-will through and through. If paying a subset of their employees was the biggest problem it'd be an easy one to solve.
  - cestith 9y ago
    Paying an equity grant isn't the same as continuing to employ someone and continuing to pay their salary. If someone has an equity grant, that's already a liability to be paid. "At will" refers to ongoing employment, not paying existing liabilities.
    - ng12 9y ago
      I'm not sure what you mean by "paying an equity grant". If you fire someone they no longer receive new equity. And for a company that's been public for 4 years with a constantly dropping stock price I doubt the volume of early employees exercising options could possibly bankrupt the company. I don't understand how that could happen to any reasonably well managed company.

wffurr 9y ago

I kind of want to buy some Twitter stock just so I can vote for this proposal. Shame the board lacks vision beyond "maximize shareholder value". Yes yes, fiduciary duty, etc. etc. There's more to life than the value of your stock.

nathancahill 9y ago
You'd need to have bought it before the record date though.
mixedCase 9y ago
> Yes yes, fiduciary duty, etc. etc. There's more to life than the value of your stock. You don't see the contradiction in this statement?
ruleabidinguser 9y ago
I think this is an unfair criticism. Theyre not in the business of charity.

davesque 9y ago

Regardless of how likely this would be to move forward, I have to say that I can't imagine a user-owned Twitter being much of a good thing. I'm pretty sure it would just devolve further into a platform for crap-flinging.

alphonsegaston 9y ago

I think the first social media network that succeeds in democratizing ownership of the platform will spread like wildfire and overtake incumbents. Everyone is already being primed for app-driven direct democracy through social media channels, so the moment this is made real, it will explode in popularity. The technical challenges for creating clones of existing services are solved problems, so all it will take is the social will.

MichaelGG 9y ago

Maybe I'm slow but am I the only one not getting the point of this at all? Users can already be owners by buying stock. And what exactly is the benefit? Random Twitter users are somehow gonna come up with plans on how to make the company profitable (heh how many "monthly fee" proposals will be submitted?)? Are there examples of large companies converting into a credit union type model? Why would shareolders want this?

wbillingsley 9y ago
Its worked quite well in a number of areas -- it tends to be good for sustainable growth, rather than adventurism, as the owners are concerned more about keeping the company sustainable and healthy than rapid growth. And the feel-good factor of it being a community organisation means people like to give it their custom. John Lewis, one of the UK's largest retailers (annual turnover about £10bn) with one of the best-respected brand is employee-owned under a cooperative structure. In terms of rescuing businesses from big egos doing badly, Portsmouth FC was rescued by a fan take-over after a number of disastrous owners who'd saddled the club with debt and left it on the verge of liquidation. It's now on a healthier footing and starting the climb back up the leagues. For Twitter, which was in a strong position to become a social utility, it's probably not a bad model. But it doesn't involve going out in a blaze of glory, so executives will hate it.

wkoszek 9y ago

It'd be much better of if each Twitter user would become a verified user and pay $1/yr for normal plan with let's say notifications about posts/replies, $6/yr for read/write access and $12/yr for some premium plan. Maybe that'd make Twitter better off financially and better platform in general. Each time I post something from my blog here I get natural organic comments etc.. Each time I post on Twitter, I get some bots following me, retweeting and others. I'd much rather pay and know there is real life there.

foxylad 9y ago
I agree. I've always been non-plussed at Twitter's valuation, given the lack of a clear monetization scheme, but then so many early unicorns were the same - eyeballs were the primary goal, with vague assumptions that revenue will automatically follow. And I agree that if you had to pay (I'd go for a dollar a month) to tweet, it would cure many of Twitter's ills. Bots, scams and fake news would pretty much disappear overnight.
- dmoy 9y ago
  The worry is probably that most of their userbase would also disappear overnight...

EternalData 9y ago

Douglas Rushkoff wrote decently well about this topic -- his argument was that Twitter was a company that never should have gone public and which would have been much more interesting had it been more decentralized and privately controlled. Maybe not as interesting financially -- but interesting in the sense of control and technological vision. Public markets can do all sorts of strange things to a company -- I think as IPOs start to wane in frequency, a lot of startups are going to take a long hard look at public markets and some might decide to take a hard pass on them, despite the gold pot at the end of the rainbow.

grogenaut 9y ago
Had they not brought in a bunch of good engineers with the lure of IPO, they would likely still be at the fail whale state.

srisa 9y ago

To go slightly off tangent, will it make sense for Twitter to enter into the micro payments landscape? All (almost?) bloggers, people working on open source projects have twitter account; even if they don't have one, creating one is easy. Donors can get some kind of acknowledgement on their (and receivers) twitter feed and the content creators will get some money.

PeterStuer 9y ago

I'm not going one way or the other, but just want to remark that 'you can already buy shares' isn't a correct response to a call for democratic ownership. Typically in the latter you have the notion of one user/one vote, while in the former model you get as many votes as you can buy.