5 ms·

That's not quite how it works if you make a formal takeover offer. It's basically telling existing shareholders that he'll buy their stock at $54. If enough of

by qsi 4y ago

That's not quite how it works if you make a formal takeover offer. It's basically telling existing shareholders that he'll buy their stock at $54. If enough of them don't want to sell (depending on how it's structured), the deal falls through. It's a one-off purchase at $54 if it does go through. He can't buy more stock in the interim (I think).

endisneigh 4y ago
Yes, but if they do not agree the price will: 1. Go to above $54, in which case musk profits and he can try again later (headwinds are strong in tech generally right now) 2. Go between $39 and $54 in which musk profits 3. Drop under $39 in which musk can further solidify his stake, for much cheaper than his takeover offer. There’s basically no scenario in which musk loses assuming he’s serious and is willing to play the long game. Musk will either make a lot of money, or own Twitter.
- asdfaoeu 4y ago
  > Musk will either make a lot of money, or own Twitter. I mean maybe he still acquires Twitter but that could be in 20 years after it's been run into the ground.
Aeolun 4y ago
I don’t see why he couldn’t buy more stock at the current selling price? As long as someone is willing to sell anyway. This takeover is aimed at people that wouldn’t ordinarily sell their stock at this point in time.
- qsi 4y ago
  IIRC the regulations are such that if you make a takeover offer, you can't do that? Not sure though, my work is only M&A-adjacent, so I'm not an expert.
chernevik 4y ago
I think this is an offer to the board, proposing that it compel all shareholders to sell at $54/share. The board can decide on the proposal without consulting the shareholders. In practice the board will do what management thinks best. The various directors probably have legal duties as fiduciaries and will want to act in a manner such that they can demonstrate they performed those duties in good faith, but they will have enormous latitude so long as they observe certain forms. There are likely procedures by which someone can force a shareholder vote on a proposal, but Musk isn't using them here. These are probably structured by the company bylaws.
- rootusrootus 4y ago
  > compel all shareholders to sell at $54/share The board doesn't have that power. If a majority of shareholders do not want to sell, they'll just replace the board if it tried such a thing. In this case, the top 10 shareholders are almost 50% of the shareholders all by themselves, so this really comes down to what they decide to do.

by qsi 4y ago

endisneigh 4y ago

Yes, but if they do not agree the price will: 1. Go to above $54, in which case musk profits and he can try again later (headwinds are strong in tech generally right now) 2. Go between $39 and $54 in which musk profits 3. Drop under $39 in which musk can further solidify his stake, for much cheaper than his takeover offer. There’s basically no scenario in which musk loses assuming he’s serious and is willing to play the long game. Musk will either make a lot of money, or own Twitter.

asdfaoeu 4y ago
> Musk will either make a lot of money, or own Twitter. I mean maybe he still acquires Twitter but that could be in 20 years after it's been run into the ground.

Aeolun 4y ago

I don’t see why he couldn’t buy more stock at the current selling price? As long as someone is willing to sell anyway. This takeover is aimed at people that wouldn’t ordinarily sell their stock at this point in time.

qsi 4y ago
IIRC the regulations are such that if you make a takeover offer, you can't do that? Not sure though, my work is only M&A-adjacent, so I'm not an expert.

chernevik 4y ago

I think this is an offer to the board, proposing that it compel all shareholders to sell at $54/share. The board can decide on the proposal without consulting the shareholders. In practice the board will do what management thinks best. The various directors probably have legal duties as fiduciaries and will want to act in a manner such that they can demonstrate they performed those duties in good faith, but they will have enormous latitude so long as they observe certain forms. There are likely procedures by which someone can force a shareholder vote on a proposal, but Musk isn't using them here. These are probably structured by the company bylaws.

rootusrootus 4y ago
> compel all shareholders to sell at $54/share The board doesn't have that power. If a majority of shareholders do not want to sell, they'll just replace the board if it tried such a thing. In this case, the top 10 shareholders are almost 50% of the shareholders all by themselves, so this really comes down to what they decide to do.