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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 absolu

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 of things that did matter. Boards have several fiduciary duties 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. If the board elects to reject this offer, then their reasons for doing so need to be very clearly elucidated, because, as Twitter is a public company, they would have to see something in their crystal ball that the rest of the market does not.

mikestew 5y ago
...and so the board has a serious legal obligation to carefully review this offer and make a decision. [citation needed] on that "legal obligation" myth that is continually propagated. As a real-life example, there's Microsoft's offer to Yahoo.
alecco 5y ago
And to note, Musk is going against the trend. Ark, the tech permabull, reduced its Twitter position. Cathie Wood just said she started selling after @jack stepped down as CEO. Interesting times.
- mgfist 5y ago
  I don't think he is. He stated that he doesn't see a future for Twitter with current management.
- filoleg 5y ago
  To be fair, Ark isn't doing so hot. So I wouldn't be concerned much about what Cathie "God wanted me to create an ETF and told me about it as a child" Wood thinks or does, when it comes to financial performance of tech companies. Here is the yearly performance for every single fund that Ark is running. Keep in mind that some of them have existed for barely a year if that, but the point still stands. ARKK (ARK Innovation ETF) - 54% down. ARKW (ARK Next Generation Internet ETF) - 50% down. ARKG (ARK Genomic Revolution ETF) - 53% down. ARKQ (ARK Autonomous Tech. & Robotics ETF) - 25% down. ARKF (ARK Fintech Innovation ETF) - 53% down. ARKX (ARK Space Exploration & Innovation ETF) - 18% down. I am not trying to attribute such performance exclusively to poor decisions, not at all. There is definitely a good amount of unforeseen circumstances that drove ARK ETFs down. But it is difficult to consider ARK's actions as a good source of predictions for tech companies they get involved with, given that 4 out of 6 of their funds are over 50% down in a year, and the rest are still down by a significant amount.
  - sytelus 5y ago
    Cathy seems to eat up a lot of completely out there stuff like no tomorrow. Lesson I learn from Ark is that don’t trust tech ETFs by people who are not actually in tech. It’s like investing in VC who has never spent time building actual product as entrepreneur and engineer. It’s also fascinating to see their fall from the sky. Just couple of years ago, every finance guru invited Cathy on their shows and asked for her wisdom. Everyone thought she had managed to get that magic bullet.
- jjoonathan 5y ago
  Too early to say. He bought, pumped, and has set up an excuse to dump. To go against the trend, he would have to hold. That remains to be seen.
  - et2o 5y ago
    Do you really think Elon Musk cares about potentially making about 100 million on a pump and dump scheme? He’s worth 240 billion
    - dralley 5y ago
      He's risked more for less in the past. Does Elon strike you as being acting purely from a place of logic and reason? If so you might be the only one to think so.
    - jjoonathan 5y ago
      Yes. Not only does he get $100M for a few tweets and talks with an accountant, he gets to hurt people he doesn't like, and he builds his reputation as one who plays hardball.
      - partiallypro 5y ago
        If the bid is rejected the price of the shares would probably go below his initial purchase price in the shares...so he'd likely lose money.
        Fomite 5y ago
        See Musk's net worth. It's entirely possible that whatever the loss is, it's an entertainment expense in his mind for a vanity project, a bit of spite, and perpetuating his reputation.
        jjoonathan 5y ago
        He can keep the circus going long enough to significantly sell into it, if he hasn't already started. He's really good at that.
cft 5y ago
Deep state via its pension funds that have unlimited access to free cash from Fed in cases like this, will long Twitter. This bidding war cannot be won by Musk. He probably factored this in, and will take significant profit once he dumps his share as he promised. Hopefully that would go towards funding a Twitter alternative.
shitpostbot 5y ago
s17n 5y ago
Unsolicited offers almost always get rejected, that's why it's called a "hostile takeover"
- postalrat 5y ago
  Wouldn't be a takeover if it's rejected.
- zwily 5y ago
  It's not hostile, yet.....
- Someone 5y ago
  To my understanding, this at the moment is neither hostile nor a takeover, but a (rather direct/rude/aggressive; pick whatever adjective you want) question to the board to advise shareholders to accept Musk’s offer. It could become any of the four options failed takeover, failed hostile takeover, takeover, or hostile takeover. If the board says “good idea” and advises shareholders to accept the offer, it could or could not become a takeover, depending on whether enough shareholders (by share count) accept it (I don’t know how many is enough, but it’s almost certainly more than 50%, as an OK would force _all_ shareholders to sell. You can’t take a company private and keep shareholders around) Technically, that wouldn’t be a hostile takeover, though, as it would be with agreement by the board. If the board advises shareholders to reject the offer Musk could persevere. In the end, if enough shareholders sell their shares to him, the board’s opinion doesn’t matter. if enough shareholders do that, it would become a hostile takeover.
  - infofarmer 5y ago
    > You can’t take a company private and keep shareholders around I don't know how customary, but technically it's possible to keep up to hundreds of shareholders around when going private.
  - s17n 5y ago
    > To my understanding, this at the moment is neither hostile nor a takeover, but a (rather direct/rude/aggressive; pick whatever adjective you want) question to the board to advise shareholders to accept Musk’s offer. Right, but a board is never going to say yes to this. If he was actually trying to get the board's agreement, the negotiations would have all happened in private and the announcement wouldn't have been made until it was basically a done deal.
memish 5y ago
Would Elon reinstate Jack to set up a Steve Jobs style comeback story?
- meatsauce 5y ago
  Never happen. Jack was part of the problem.
  - Apocryphon 5y ago
    Reinstate Dick. Having a comedian in charge again would be funny.
    - LegitShady 5y ago
      "Let me introduce your new CEO, a clone made by crossing Joe Rogan and Sergei Brin."
    - reducesuffering 5y ago
      He doesn't seem very funny. "Me-first capitalists who think you can separate society from business are going to be the first people lined up against the wall and shot in the revolution. I'll happily provide video commentary." — Dick Costolo (He deleted it from Twitter, who'da thunk)
      - Apocryphon 5y ago
        Arthur Fleck wasn't very funny either, but the situation of giving a standup comic great power is.
  - cinntaile 5y ago
    What was the problem exactly and how has it improved now that Jack is gone?
    - cinntaile 5y ago
      I have received plenty of reasons, but none from meatsauce so we unfortunately don't know what he meant.
dkjaudyeqooe 5y ago
Anyone notice that the price is $54.20? A coincidence? A week out from 4/20?
- dmarcos 5y ago
  Not a coincidence. Elon also offered $420 per share when he tried to take Tesla private. Context for the unfamiliar: https://en.m.wikipedia.org/wiki/420_(cannabis_culture) https://en.m.wikipedia.org/wiki/420_(cannabis_culture)
  - memish 5y ago
    At TED yesterday he said it's as much a reference to Hitchhiker's Guide to the Galaxy, one of his favorite books. 42. The answer to everything.
  - dkjaudyeqooe 5y ago
    Yeah that's what I was referring to, making me think this is more of the same juvenile shenanigans.
    - ProjectArcturis 5y ago
      Yeah, where's he going to get $42B cash? A typical offer would describe the source of funds. This one doesn't.
      - skinnymuch 5y ago
        He will sell 42000 NFTs to his followers.
      - hackerfromthefu 5y ago
        He can get a loan for that much against his other holdings of $260B last I heard, pretty easily I imagine. Or he could sell some.
    - mywittyname 5y ago
AlexandrB 5y ago
I don't get how the logistics work in a move like this. If you're a shareholder and the board approves the sale are you forced to sell your shares to Elon at the stated price? What if you don't want to sell? Edit: I also wonder how leveraged positions, especially shorts, get resolved.
- chippiewill 5y ago
  The sale can be forced so long as 75% of shareholders approve and the purchase price is above the sale price during the offer period. No idea about shorts. I would assume that the short seller would simply have to pay the original owner the end purchase price.
- cloutchaser 5y ago
  Depends on the shareholder agreement and how the board fits into that. By default it would be something like - if the board approved it goes to a shareholder vote, and if 75% or 90% of the shareholders approve the rest are dragged. I doubt the board can force all shareholders to sell, that would be an insane power position for shareholders
  - AlexandrB 5y ago
    This is informative, thank you. I wonder what portion of Twitter investors are index fund companies like like Vanguard and "institutional investors" like pension funds that are unlikely to object. And obviously Elon himself is a ~10% shareholder. Seems likely that this would pass a vote easily.
    - nonethewiser 5y ago
      78.4% search "Inst Own" https://finviz.com/quote.ashx?t=TWTR https://finviz.com/quote.ashx?t=TWTR That's actually crazy to think about... so besides Elon, only 11.6% of shares are privately held? Meaning Elon holds about half of all privately held shares? Unless somehow he is in the 78.4% but I don't think so.
babypuncher 5y ago
> 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.
- dragonwriter 5y ago
  > 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 Welcome to capitalism.
- mgfist 5y ago
  Shareholders can vote no. It's why having a majority shareholder is so powerful. But also it's the job of the regulatory body to be the check for society
- deleted 5y ago
  [deleted]
- qez 5y ago
  Who decides what's right for humanity? Someone has to. How about the owners... aka the shareholders.
  - andrepd 5y ago
    Why should a very small number of people with capital decide that? Clearly that's not very democratic.
    - yellow_postit 5y ago
      What system would you propose? Shareholders seems like the best of the worst type scenarios. They have skin in the game, they are countable, they have legal status.
    - 5y ago
randyrand 5y ago
Fiduciary duty =/= short term gains of company stock. Shareholder interest =/= money. Shareholder votes allow other considerations can be taken into account. I agree with your comment, but it's not that hard to reject IMO.
- texasbigdata 5y ago
  Delaware law is a bit more nuanced here.
  - ABCLAW 5y ago
    Not really. The OP in this thread is very overblown. The business judgement rule is a cornerstone of corporate law in most western jurisdictions - Delaware's framework, if anything, enhances the value of the scope and level of deference offered by the rule. https://corplaw.delaware.gov/delaware-way-business-judgment/#:~:text=Delaware%20law%20affords%20directors%20making,if%20it%20is%20undertaken%20with https://corplaw.delaware.gov/delaware-way-business-judgment/...
- missedthecue 5y ago
  Boards have been sued and won against for not taking takeover bids. So there is some precedence.
DelaneyM 5y ago
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 why this bid is very likely to be rejected. (This is easier to explain with a white board, tbh.)
- bjornsing 5y ago
  You explained it perfectly, no white board needed. I can only add one minor point from a general and international perspective: 50% may not always be enough. At least in Sweden I think you need 90% to accept a bid before you can legally force the remaining 10% to sell their shares. Even if you accept that there will be minority shareholders you will need 67% before you can do some things, like e.g. issue new shares without giving minority owners right of first refusal. I'm sure there's a lot of devils in the details all over the world, and I'd be surprised if there are none in the US.
- ErikVandeWater 5y ago
  You'd have to be really damn sure that Twitter is worth more than what Musk is paying. It's hard to see how an owner of Twitter stock could rationally reject an offer with a guaranteed +38% return. For any serious investor, even if they believe Twitter is worth twice what it is now, they must have several other stocks they believe are also worth twice what they are now. And if Elon bought all of them out at +38% returns, that would be a tremendous year investing.
- RC_ITR 5y ago
  >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'
meerita 5y ago
If they don't accept this offer, the stock will plunge.
- cwkoss 5y ago
  Then Musk can make a slightly lower offer and make the price plunge again.
mike00632 5y ago
"NO RISK"? There is a very clear risk of transformating the social media titan that is Twitter into Truth Social, a sideshow of a forum that is dedicated to the worship of one man. That would plummet the stock price.
- max599 5y ago
  >That would plummet the stock From the point of view of the investors, there is no risk. If offer is accepted, they get their bags of cash and walk away with hopefully more than what they paid for those share. Musk could shut down the business to the ground on day 1 and they still get to keep their cash (I wish he would).
- partiallypro 5y ago
  This is a fear based on nothing that I keep seeing peddled by people with no experience moderating anything in their entire life, and don't remember early Twitter. Other companies have actually censored theirselves into irrelevance (almost happed to OnlyFans, already happened to Tumblr, Yahoo, etc.) So a model with more fair and transparent moderation would likely be a business boon. Twitter is not at all transparent on why some things are allowed to stay while others are banned entirely. Also the shareholders would get cash, they would no longer own the company at all and the future of the company would no longer be of their concern. Musk could shut it down and it wouldn't matter to investors, they'd already have their money.
  - krisboyz781 5y ago
    You can’t moderate a free speech platform, that’s the thing. So I can realistically harass someone online and be well within my bounds of “free speech”. I can say the most vile things ever and be well within my bounds of free speech
    - heroicdanger 5y ago
      This is a common misconception. A free speech platform does not mean, and has never meant, absolute free speech. There are tens and possibly hundreds of exceptions to free speech as demanded by US law, and they are free speech purists.
jtdev 5y ago
belter 5y ago
A company is not a bag of potatoes in the market to sell at the whims of the highest bidder. Here is what would be looking after their fiduciary duties: The company had a loss of 200 million dollars this year. Was only profitable 2 years out of its 16 years of existence. The board should state that Twitter in the hands of Elon Musk, could jeopardize its current unique and somewhat also precarious, place in social media. The company should ask Elon Musk, to first explain to shareholders what he plans to do with the company, and how it would benefit them. Provide details on shape and form of how his plan would be implemented. Until then, rejecting the offer is looking after their fiduciary duties.
- ksdale 5y ago
  It will be rather difficult for the board to argue that it's satisfying it's fiduciary duty by rejecting an offer with such a high premium so the current shareholders can continue to own a company that's losing money.
- carlosdp 5y ago
  > The board should state that Twitter in the hands of Elon Musk, could jeopardize its current unique and somewhat also precarious, place in social media. But see, this point is irrelevant in this scenario. If they sell, every current shareholder gets bought out in full, they no longer have a stake in the company. He could shut it down the next day and it wouldn't affect the former shareholders, the company's future at that point is only Elon (and Twitter employees' and users') concern. It's fiduciary duty to the shareholders, not the company itself, not the employees.
  - belter 5y ago
    A board works for the company not directly the shareholders. Shareholders think they are the owners of a company but they are not. "Shareholders think they own the company — they are wrong": https://www.ft.com/content/7bd1b20a-879b-11e5-90de-f44762bf9896 https://www.ft.com/content/7bd1b20a-879b-11e5-90de-f44762bf9... "Board of directors have a fiduciary duty to exercise due care in how they manage a corporation's affairs and also have the duty of loyalty and obedience to the corporation. A fiduciary duty means that both directors and officers handle their powers only for the collective benefit of the corporation AND (my emphasis) its stockholders." https://www.upcounsel.com/board-of-directors-fiduciary-duty https://www.upcounsel.com/board-of-directors-fiduciary-duty
deleted 5y ago
[deleted]
GoodJokes 5y ago
MrMan 5y ago
in the financial press I see people saying the board should not accept this lowball, non-negotiable offer.
coffeeblack 5y ago
One risk may be that a lot of the blue hairs among the staff may choose to leave the company. Then again, that might be a positive thing for the company’s economic performance.
spiantino 5y ago
Your logic would make it seem like a hostile takeover would be accepted with any premium, and companies routinely have to bid 40 or 50% higher. Maybe it's different with a poison pill in place as the onus is on the board, but I don't think its obvious what the board should/will do
crate_barre 5y ago
Truth of the matter is before Elon ever gets Twitter another tech giant will buy it without hesitation. They should sell to him because all he is doing is either buying Twitter at fair value or doing pre-launch hype for a competitor which will include the accumulation of other platforms including Trump’s Truth social, shit like substack, which he can easily get for less than 10 billion, Mastadon, etc.
- betwixthewires 5y ago
  You can't buy mastodon, the software is licensed AGPL and the network is run by it's users. You could buy stewardship of the software and the trademark if it's registered, like google did with android, but you never own GPL licensed software, only the users do.
  - crate_barre 5y ago
    I think you still understand my point. This guy roughly says if there’s no electric car, build your own. If there is no reusable rocket, build your own. If big tech is stifling free speech … All successful people continuously repeat what worked for them in the past.
    - betwixthewires 5y ago
      I get your point, I just figured I'd point out your misunderstanding of mastodon specifically, to you so you can better understand it. It isn't a just a twitter alternative.
bspear 5y ago
All I can think is... lucky Jack, and poor Parag
- jereees 5y ago
  The ultimate scapegoat tbh. The whole things was just for show (completely unfounded statement, but I hold it to heart).
- JohnWhigham 5y ago
  Nah fuck him. He basically said freedom of speech won't be a factor under his reign. Guarantee he's part of the reason Elon is making this play.
namesbc 5y ago
No board is going to accept a low-ball offer, and that assumes Musk is even seriously offering and not pulling another stupid stunt.
- boringg 5y ago
  Part of his strength is that he keeps people on his toes. What is a real move vs when is he trolling.
- trixie_ 5y ago
  Low-ball? Twitter is a financial dumpster fire.
la6472 5y ago
No but the results are out: https://nypost.com/2022/04/27/conservatives-see-spike-in-followers-on-elon-musks-twitter/ https://nypost.com/2022/04/27/conservatives-see-spike-in-fol...

mikestew 5y ago

...and so the board has a serious legal obligation to carefully review this offer and make a decision. [citation needed] on that "legal obligation" myth that is continually propagated. As a real-life example, there's Microsoft's offer to Yahoo.

alecco 5y ago

And to note, Musk is going against the trend. Ark, the tech permabull, reduced its Twitter position. Cathie Wood just said she started selling after @jack stepped down as CEO. Interesting times.

mgfist 5y ago
I don't think he is. He stated that he doesn't see a future for Twitter with current management.
filoleg 5y ago
To be fair, Ark isn't doing so hot. So I wouldn't be concerned much about what Cathie "God wanted me to create an ETF and told me about it as a child" Wood thinks or does, when it comes to financial performance of tech companies. Here is the yearly performance for every single fund that Ark is running. Keep in mind that some of them have existed for barely a year if that, but the point still stands. ARKK (ARK Innovation ETF) - 54% down. ARKW (ARK Next Generation Internet ETF) - 50% down. ARKG (ARK Genomic Revolution ETF) - 53% down. ARKQ (ARK Autonomous Tech. & Robotics ETF) - 25% down. ARKF (ARK Fintech Innovation ETF) - 53% down. ARKX (ARK Space Exploration & Innovation ETF) - 18% down. I am not trying to attribute such performance exclusively to poor decisions, not at all. There is definitely a good amount of unforeseen circumstances that drove ARK ETFs down. But it is difficult to consider ARK's actions as a good source of predictions for tech companies they get involved with, given that 4 out of 6 of their funds are over 50% down in a year, and the rest are still down by a significant amount.
- sytelus 5y ago
  Cathy seems to eat up a lot of completely out there stuff like no tomorrow. Lesson I learn from Ark is that don’t trust tech ETFs by people who are not actually in tech. It’s like investing in VC who has never spent time building actual product as entrepreneur and engineer. It’s also fascinating to see their fall from the sky. Just couple of years ago, every finance guru invited Cathy on their shows and asked for her wisdom. Everyone thought she had managed to get that magic bullet.
jjoonathan 5y ago
Too early to say. He bought, pumped, and has set up an excuse to dump. To go against the trend, he would have to hold. That remains to be seen.
- et2o 5y ago
  Do you really think Elon Musk cares about potentially making about 100 million on a pump and dump scheme? He’s worth 240 billion
  - dralley 5y ago
    He's risked more for less in the past. Does Elon strike you as being acting purely from a place of logic and reason? If so you might be the only one to think so.
  - jjoonathan 5y ago
    Yes. Not only does he get $100M for a few tweets and talks with an accountant, he gets to hurt people he doesn't like, and he builds his reputation as one who plays hardball.
    - partiallypro 5y ago
      If the bid is rejected the price of the shares would probably go below his initial purchase price in the shares...so he'd likely lose money.
      - Fomite 5y ago
        See Musk's net worth. It's entirely possible that whatever the loss is, it's an entertainment expense in his mind for a vanity project, a bit of spite, and perpetuating his reputation.
      - jjoonathan 5y ago
        He can keep the circus going long enough to significantly sell into it, if he hasn't already started. He's really good at that.

cft 5y ago

Deep state via its pension funds that have unlimited access to free cash from Fed in cases like this, will long Twitter. This bidding war cannot be won by Musk. He probably factored this in, and will take significant profit once he dumps his share as he promised. Hopefully that would go towards funding a Twitter alternative.

shitpostbot 5y ago

s17n 5y ago

Unsolicited offers almost always get rejected, that's why it's called a "hostile takeover"

postalrat 5y ago
Wouldn't be a takeover if it's rejected.
zwily 5y ago
It's not hostile, yet.....
Someone 5y ago
To my understanding, this at the moment is neither hostile nor a takeover, but a (rather direct/rude/aggressive; pick whatever adjective you want) question to the board to advise shareholders to accept Musk’s offer. It could become any of the four options failed takeover, failed hostile takeover, takeover, or hostile takeover. If the board says “good idea” and advises shareholders to accept the offer, it could or could not become a takeover, depending on whether enough shareholders (by share count) accept it (I don’t know how many is enough, but it’s almost certainly more than 50%, as an OK would force _all_ shareholders to sell. You can’t take a company private and keep shareholders around) Technically, that wouldn’t be a hostile takeover, though, as it would be with agreement by the board. If the board advises shareholders to reject the offer Musk could persevere. In the end, if enough shareholders sell their shares to him, the board’s opinion doesn’t matter. if enough shareholders do that, it would become a hostile takeover.
- infofarmer 5y ago
  > You can’t take a company private and keep shareholders around I don't know how customary, but technically it's possible to keep up to hundreds of shareholders around when going private.
- s17n 5y ago
  > To my understanding, this at the moment is neither hostile nor a takeover, but a (rather direct/rude/aggressive; pick whatever adjective you want) question to the board to advise shareholders to accept Musk’s offer. Right, but a board is never going to say yes to this. If he was actually trying to get the board's agreement, the negotiations would have all happened in private and the announcement wouldn't have been made until it was basically a done deal.

memish 5y ago

Would Elon reinstate Jack to set up a Steve Jobs style comeback story?

meatsauce 5y ago
Never happen. Jack was part of the problem.
- Apocryphon 5y ago
  Reinstate Dick. Having a comedian in charge again would be funny.
  - LegitShady 5y ago
    "Let me introduce your new CEO, a clone made by crossing Joe Rogan and Sergei Brin."
  - reducesuffering 5y ago
    He doesn't seem very funny. "Me-first capitalists who think you can separate society from business are going to be the first people lined up against the wall and shot in the revolution. I'll happily provide video commentary." — Dick Costolo (He deleted it from Twitter, who'da thunk)
    - Apocryphon 5y ago
      Arthur Fleck wasn't very funny either, but the situation of giving a standup comic great power is.
- cinntaile 5y ago
  What was the problem exactly and how has it improved now that Jack is gone?
  - cinntaile 5y ago
    I have received plenty of reasons, but none from meatsauce so we unfortunately don't know what he meant.

dkjaudyeqooe 5y ago

Anyone notice that the price is $54.20? A coincidence? A week out from 4/20?

dmarcos 5y ago
Not a coincidence. Elon also offered $420 per share when he tried to take Tesla private. Context for the unfamiliar: https://en.m.wikipedia.org/wiki/420_(cannabis_culture) https://en.m.wikipedia.org/wiki/420_(cannabis_culture)
- memish 5y ago
  At TED yesterday he said it's as much a reference to Hitchhiker's Guide to the Galaxy, one of his favorite books. 42. The answer to everything.
- dkjaudyeqooe 5y ago
  Yeah that's what I was referring to, making me think this is more of the same juvenile shenanigans.
  - ProjectArcturis 5y ago
    Yeah, where's he going to get $42B cash? A typical offer would describe the source of funds. This one doesn't.
    - skinnymuch 5y ago
      He will sell 42000 NFTs to his followers.
    - hackerfromthefu 5y ago
      He can get a loan for that much against his other holdings of $260B last I heard, pretty easily I imagine. Or he could sell some.
  - mywittyname 5y ago

AlexandrB 5y ago

I don't get how the logistics work in a move like this. If you're a shareholder and the board approves the sale are you forced to sell your shares to Elon at the stated price? What if you don't want to sell? Edit: I also wonder how leveraged positions, especially shorts, get resolved.

chippiewill 5y ago
The sale can be forced so long as 75% of shareholders approve and the purchase price is above the sale price during the offer period. No idea about shorts. I would assume that the short seller would simply have to pay the original owner the end purchase price.
cloutchaser 5y ago
Depends on the shareholder agreement and how the board fits into that. By default it would be something like - if the board approved it goes to a shareholder vote, and if 75% or 90% of the shareholders approve the rest are dragged. I doubt the board can force all shareholders to sell, that would be an insane power position for shareholders
- AlexandrB 5y ago
  This is informative, thank you. I wonder what portion of Twitter investors are index fund companies like like Vanguard and "institutional investors" like pension funds that are unlikely to object. And obviously Elon himself is a ~10% shareholder. Seems likely that this would pass a vote easily.
  - nonethewiser 5y ago
    78.4% search "Inst Own" https://finviz.com/quote.ashx?t=TWTR https://finviz.com/quote.ashx?t=TWTR That's actually crazy to think about... so besides Elon, only 11.6% of shares are privately held? Meaning Elon holds about half of all privately held shares? Unless somehow he is in the 78.4% but I don't think so.

babypuncher 5y ago

> 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.

dragonwriter 5y ago
> 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 Welcome to capitalism.
mgfist 5y ago
Shareholders can vote no. It's why having a majority shareholder is so powerful. But also it's the job of the regulatory body to be the check for society
deleted 5y ago
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qez 5y ago
Who decides what's right for humanity? Someone has to. How about the owners... aka the shareholders.
- andrepd 5y ago
  Why should a very small number of people with capital decide that? Clearly that's not very democratic.
  - yellow_postit 5y ago
    What system would you propose? Shareholders seems like the best of the worst type scenarios. They have skin in the game, they are countable, they have legal status.
  - 5y ago

randyrand 5y ago

Fiduciary duty =/= short term gains of company stock. Shareholder interest =/= money. Shareholder votes allow other considerations can be taken into account. I agree with your comment, but it's not that hard to reject IMO.

texasbigdata 5y ago
Delaware law is a bit more nuanced here.
- ABCLAW 5y ago
  Not really. The OP in this thread is very overblown. The business judgement rule is a cornerstone of corporate law in most western jurisdictions - Delaware's framework, if anything, enhances the value of the scope and level of deference offered by the rule. https://corplaw.delaware.gov/delaware-way-business-judgment/#:~:text=Delaware%20law%20affords%20directors%20making,if%20it%20is%20undertaken%20with https://corplaw.delaware.gov/delaware-way-business-judgment/...
missedthecue 5y ago
Boards have been sued and won against for not taking takeover bids. So there is some precedence.

DelaneyM 5y ago

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 why this bid is very likely to be rejected. (This is easier to explain with a white board, tbh.)

bjornsing 5y ago
You explained it perfectly, no white board needed. I can only add one minor point from a general and international perspective: 50% may not always be enough. At least in Sweden I think you need 90% to accept a bid before you can legally force the remaining 10% to sell their shares. Even if you accept that there will be minority shareholders you will need 67% before you can do some things, like e.g. issue new shares without giving minority owners right of first refusal. I'm sure there's a lot of devils in the details all over the world, and I'd be surprised if there are none in the US.
ErikVandeWater 5y ago
You'd have to be really damn sure that Twitter is worth more than what Musk is paying. It's hard to see how an owner of Twitter stock could rationally reject an offer with a guaranteed +38% return. For any serious investor, even if they believe Twitter is worth twice what it is now, they must have several other stocks they believe are also worth twice what they are now. And if Elon bought all of them out at +38% returns, that would be a tremendous year investing.
RC_ITR 5y ago
>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'

meerita 5y ago

If they don't accept this offer, the stock will plunge.

cwkoss 5y ago
Then Musk can make a slightly lower offer and make the price plunge again.

mike00632 5y ago

"NO RISK"? There is a very clear risk of transformating the social media titan that is Twitter into Truth Social, a sideshow of a forum that is dedicated to the worship of one man. That would plummet the stock price.

max599 5y ago
>That would plummet the stock From the point of view of the investors, there is no risk. If offer is accepted, they get their bags of cash and walk away with hopefully more than what they paid for those share. Musk could shut down the business to the ground on day 1 and they still get to keep their cash (I wish he would).
partiallypro 5y ago
This is a fear based on nothing that I keep seeing peddled by people with no experience moderating anything in their entire life, and don't remember early Twitter. Other companies have actually censored theirselves into irrelevance (almost happed to OnlyFans, already happened to Tumblr, Yahoo, etc.) So a model with more fair and transparent moderation would likely be a business boon. Twitter is not at all transparent on why some things are allowed to stay while others are banned entirely. Also the shareholders would get cash, they would no longer own the company at all and the future of the company would no longer be of their concern. Musk could shut it down and it wouldn't matter to investors, they'd already have their money.
- krisboyz781 5y ago
  You can’t moderate a free speech platform, that’s the thing. So I can realistically harass someone online and be well within my bounds of “free speech”. I can say the most vile things ever and be well within my bounds of free speech
  - heroicdanger 5y ago
    This is a common misconception. A free speech platform does not mean, and has never meant, absolute free speech. There are tens and possibly hundreds of exceptions to free speech as demanded by US law, and they are free speech purists.

jtdev 5y ago

belter 5y ago

A company is not a bag of potatoes in the market to sell at the whims of the highest bidder. Here is what would be looking after their fiduciary duties: The company had a loss of 200 million dollars this year. Was only profitable 2 years out of its 16 years of existence. The board should state that Twitter in the hands of Elon Musk, could jeopardize its current unique and somewhat also precarious, place in social media. The company should ask Elon Musk, to first explain to shareholders what he plans to do with the company, and how it would benefit them. Provide details on shape and form of how his plan would be implemented. Until then, rejecting the offer is looking after their fiduciary duties.

ksdale 5y ago
It will be rather difficult for the board to argue that it's satisfying it's fiduciary duty by rejecting an offer with such a high premium so the current shareholders can continue to own a company that's losing money.
carlosdp 5y ago
> The board should state that Twitter in the hands of Elon Musk, could jeopardize its current unique and somewhat also precarious, place in social media. But see, this point is irrelevant in this scenario. If they sell, every current shareholder gets bought out in full, they no longer have a stake in the company. He could shut it down the next day and it wouldn't affect the former shareholders, the company's future at that point is only Elon (and Twitter employees' and users') concern. It's fiduciary duty to the shareholders, not the company itself, not the employees.
- belter 5y ago
  A board works for the company not directly the shareholders. Shareholders think they are the owners of a company but they are not. "Shareholders think they own the company — they are wrong": https://www.ft.com/content/7bd1b20a-879b-11e5-90de-f44762bf9896 https://www.ft.com/content/7bd1b20a-879b-11e5-90de-f44762bf9... "Board of directors have a fiduciary duty to exercise due care in how they manage a corporation's affairs and also have the duty of loyalty and obedience to the corporation. A fiduciary duty means that both directors and officers handle their powers only for the collective benefit of the corporation AND (my emphasis) its stockholders." https://www.upcounsel.com/board-of-directors-fiduciary-duty https://www.upcounsel.com/board-of-directors-fiduciary-duty

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GoodJokes 5y ago

MrMan 5y ago

in the financial press I see people saying the board should not accept this lowball, non-negotiable offer.

coffeeblack 5y ago

One risk may be that a lot of the blue hairs among the staff may choose to leave the company. Then again, that might be a positive thing for the company’s economic performance.

spiantino 5y ago

Your logic would make it seem like a hostile takeover would be accepted with any premium, and companies routinely have to bid 40 or 50% higher. Maybe it's different with a poison pill in place as the onus is on the board, but I don't think its obvious what the board should/will do

crate_barre 5y ago

Truth of the matter is before Elon ever gets Twitter another tech giant will buy it without hesitation. They should sell to him because all he is doing is either buying Twitter at fair value or doing pre-launch hype for a competitor which will include the accumulation of other platforms including Trump’s Truth social, shit like substack, which he can easily get for less than 10 billion, Mastadon, etc.

betwixthewires 5y ago
You can't buy mastodon, the software is licensed AGPL and the network is run by it's users. You could buy stewardship of the software and the trademark if it's registered, like google did with android, but you never own GPL licensed software, only the users do.
- crate_barre 5y ago
  I think you still understand my point. This guy roughly says if there’s no electric car, build your own. If there is no reusable rocket, build your own. If big tech is stifling free speech … All successful people continuously repeat what worked for them in the past.
  - betwixthewires 5y ago
    I get your point, I just figured I'd point out your misunderstanding of mastodon specifically, to you so you can better understand it. It isn't a just a twitter alternative.

bspear 5y ago

All I can think is... lucky Jack, and poor Parag

jereees 5y ago
The ultimate scapegoat tbh. The whole things was just for show (completely unfounded statement, but I hold it to heart).
JohnWhigham 5y ago
Nah fuck him. He basically said freedom of speech won't be a factor under his reign. Guarantee he's part of the reason Elon is making this play.

namesbc 5y ago

No board is going to accept a low-ball offer, and that assumes Musk is even seriously offering and not pulling another stupid stunt.

boringg 5y ago
Part of his strength is that he keeps people on his toes. What is a real move vs when is he trolling.
trixie_ 5y ago
Low-ball? Twitter is a financial dumpster fire.

la6472 5y ago

No but the results are out: https://nypost.com/2022/04/27/conservatives-see-spike-in-followers-on-elon-musks-twitter/ https://nypost.com/2022/04/27/conservatives-see-spike-in-fol...