5 ms·

It doesn't matter whether the stock is likely to reach $70 or not. What matters is that musk must convince the majority of stock holders to sell him their share

It doesn't matter whether the stock is likely to reach $70 or not. What matters is that musk must convince the majority of stock holders to sell him their shares. If he wants to take over the company. The current offer is getting rejected. He'll need to up his bid. He really needs to offer a price they or the board can't refuse. A price way closer to the all time high or above it. No shareholder is going to give up their shares for altruistic reasons, that's not why the bought them, so they are waiting for the right price.

syshum 5y ago
Which is likely $54.20... a Rejection following by Elon dumping his 9% $54.20 will seem like a fortune
mbreese 5y ago
> must convince the majority of stock holders I don’t think it is the majority — I think he needs all of them. Anything less than 100% and he’d have to worry about fiduciary duty to minority shareholders. And if taking a company private, you need to have all of the shareholders on board. I might not fully understand this dynamic, but I thought that was the reason why he wanted to buy 100% and not just a controlling interest.
- kjksf 5y ago
  No sale would ever be completed if you needed 100% of shareholders to agree. A jokester could buy 1 twitter share for $45 and block a sale. Such transaction must be put to vote by shareholders and only a majority needs to approve.
  - mbreese 5y ago
    So long as the transaction was fair... But, Musk has stated that he wanted to take Twitter private. Doesn't that change the calculations somewhat? I mean, you want to buy all of the shares at once, otherwise, how do you determine the fair market price for the last hold-out shares? They would be worth more that the early sellers. I guess I'm saying that because he has a stated interest in taking the company private, this is more complicated than a traditional M&A event. (Hence why it may not be worth it to do this as a hostile takeover).
    - WheelsAtLarge 5y ago
      It doesn't have to be fair to you just the majority of the stockholders. True, you can reject the offer as a stockholder but the company's stock will be taken off the exchange once the 50+% stockholder decides the company will no longer be public. So if you want to ever sell you'll have to look for a buyer yourself. Imagine having all your money locked up. Not knowing when, if ever, you'll be able to get your money out. Also, if you try to go to court then you'll have to finance the suit and you'll have to have a valid reason to go to court. And to top it all as a minority stockholder you'll have very little influence over how to run the company. It's easier to sell at the price that's offered.
- WheelsAtLarge 5y ago
  Once a stockholder gets control of the majority of the stock he/she can do whatever they want short of fraud. Hence, if I control 50+% of the shares I can sell the company to anyone and take it private if that's what I want. The board would still need to approve it but as the controlling shareholder I can replace the board with members that will do what I want so they can't stop me. Again, I can't commit fraud but if I can justify it then I can do it. No minority stock holder can stop me.
- bostik 5y ago
  Almost every public company has a forced buy-out clause in their stock's trading and ownership rules. That is, if someone ends up owning $VAST_MAJORITY of a company's stock, they can then forcibly purchase the small fractions off at an acceptable going-private premium. I think the threshold for forced buy-out tends to be >90%.
- smaryjerry 5y ago
  You always have to treat owners essentially equally but only a majority is typically required to make decisions. Meaning you can’t decide to give one owner distributions or dividend and not other owners using just a majority vote but you can take most action that guides the company.

syshum 5y ago

Which is likely $54.20... a Rejection following by Elon dumping his 9% $54.20 will seem like a fortune

mbreese 5y ago

> must convince the majority of stock holders I don’t think it is the majority — I think he needs all of them. Anything less than 100% and he’d have to worry about fiduciary duty to minority shareholders. And if taking a company private, you need to have all of the shareholders on board. I might not fully understand this dynamic, but I thought that was the reason why he wanted to buy 100% and not just a controlling interest.

kjksf 5y ago
No sale would ever be completed if you needed 100% of shareholders to agree. A jokester could buy 1 twitter share for $45 and block a sale. Such transaction must be put to vote by shareholders and only a majority needs to approve.
- mbreese 5y ago
  So long as the transaction was fair... But, Musk has stated that he wanted to take Twitter private. Doesn't that change the calculations somewhat? I mean, you want to buy all of the shares at once, otherwise, how do you determine the fair market price for the last hold-out shares? They would be worth more that the early sellers. I guess I'm saying that because he has a stated interest in taking the company private, this is more complicated than a traditional M&A event. (Hence why it may not be worth it to do this as a hostile takeover).
  - WheelsAtLarge 5y ago
    It doesn't have to be fair to you just the majority of the stockholders. True, you can reject the offer as a stockholder but the company's stock will be taken off the exchange once the 50+% stockholder decides the company will no longer be public. So if you want to ever sell you'll have to look for a buyer yourself. Imagine having all your money locked up. Not knowing when, if ever, you'll be able to get your money out. Also, if you try to go to court then you'll have to finance the suit and you'll have to have a valid reason to go to court. And to top it all as a minority stockholder you'll have very little influence over how to run the company. It's easier to sell at the price that's offered.
WheelsAtLarge 5y ago
Once a stockholder gets control of the majority of the stock he/she can do whatever they want short of fraud. Hence, if I control 50+% of the shares I can sell the company to anyone and take it private if that's what I want. The board would still need to approve it but as the controlling shareholder I can replace the board with members that will do what I want so they can't stop me. Again, I can't commit fraud but if I can justify it then I can do it. No minority stock holder can stop me.
bostik 5y ago
Almost every public company has a forced buy-out clause in their stock's trading and ownership rules. That is, if someone ends up owning $VAST_MAJORITY of a company's stock, they can then forcibly purchase the small fractions off at an acceptable going-private premium. I think the threshold for forced buy-out tends to be >90%.
smaryjerry 5y ago
You always have to treat owners essentially equally but only a majority is typically required to make decisions. Meaning you can’t decide to give one owner distributions or dividend and not other owners using just a majority vote but you can take most action that guides the company.