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>Everyone currently holding $TWTR believes that the true value is greater than the current price. This is not exactly true. Everyone holding Twitter believes
by 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'
- RaymondDeWitt 5y agoHow was Musk's offer - a public disclosure with few conditions or contingencies, made in bad faith? At face value, it does not violate basic standards of honesty or appear to deliberately mislead.
- jjeaff 5y agoIt's another 420 reference just like his claim to have financing ready to take Tesla private which turned out to be false and just a joke.
- deleted 5y ago[deleted]
- mdoms 5y agoYou mean like his offer to take Tesla private - a public disclosure with few conditions or contingencies?
- colinmhayes 5y agoAt face value Musk has a history of paying large SEC fines because he lied to investors.
- memish 5y agoFrom TED yesterday. "Funding was indeed secured. I should say I do not have respect for the SEC in that situation. I don’t mean to blame everyone at the SEC, but certainly the San Francisco office. The SEC knew that funding was secured. They pursued an active public investigation, nonetheless. I was forced to concede to the SEC unlawfully."
- colinmhayes 5y agoI don't think him saying that makes it true. He certainly never brought Tesla private or brought a serious offer to do so.
- deleted 5y ago[deleted]
- RC_ITR 5y agoI implore you to do what I suggested in the parent comment. How many times is “non-binding” said in the document?
- ratsmack 5y ago>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' I must assume this statement is just a personal opinion rather that an SEC ruling.
- fallingknife 5y agoAny initial offer is going to be non-binding. This is standard.
- mathlover2 5y agoIIRC he claimed that this was his only offer and that he would sell if it was refused.
- mathlover2 5y ago> Mr. Musk called the bid his “best and final offer,” adding that if his proposal isn’t accepted “I would need to reconsider my position as a shareholder.” Mr. Musk earlier this year built a position of more than 9% in Twitter. Source: https://www.wsj.com/articles/elon-musk-offers-to-buy-rest-of-twitter-for-54-20-a-share-11649932296?mod=djemalertNEWS https://www.wsj.com/articles/elon-musk-offers-to-buy-rest-of...
- dheera 5y agoHe could sell it for higher? People would probably buy the shares at higher price if they knew it came from Elon.
- RC_ITR 5y agoYeah and any initial offer is worth the paper it’s printed on. That is not the mainstream understanding of this “offer” though and that’s the point I’m trying to make.
- cjensen 5y agoHolding a volatile and risky asset implies that the holder thinks there is a significant win available to offset the costs of the risks. It's reasonable to assume that projected price is far above market.
- splitstud 5y ago
- lupire 5y ago> This can mean that it will decline less than cash (i.e. inflation) This is meaningless because stock price is denominated in dollars. Inflation expectation means that the stock price is going up; that is, be worth more in dollars. Anyone choosing to hold a stock prefers that stock more than the dollar price it would fetch. Otherwise they would sell.