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Twitter Adopts Limited Duration Shareholder Rights Plan

100 points by minimaxir 5y ago

dang 5y ago
Related ongoing thread: Twitter board adopts poison pill after Musk’s $43B bid to buy company - https://news.ycombinator.com/item?id=31043439 https://news.ycombinator.com/item?id=31043439 - April 2022 (286 comments)
minimaxir 5y ago
This is most likely a "poison pill" enacted to prevent Elon Musk from successfully performing a hostile takeover. https://www.axios.com/twitter-elon-musk-poison-pill-7a62f6d6-b77a-4481-a2e3-5a7081557a84.html https://www.axios.com/twitter-elon-musk-poison-pill-7a62f6d6...
- zrail 5y ago
  This is the very definition of a corporate poison pill.
aww_dang 5y ago
What happens next here? Elon's lawyers fire back and challenge this?
- david927 5y ago
  I think the threat is that he dumps his entire position and craters the stock price.
  - bdcravens 5y ago
    Good chance his goal was a pump and dump. So far it's working.
    - nightski 5y ago
      That makes no sense because it hasn't really pumped. Stock price is basically where it was 5 days ago.
      - bestbuyer__ 5y ago
        Look at where it was a month ago.
        MangoCoffee 5y ago
        it wen up after the news break about Elon bought 9%.
      - phoe18 5y ago
        I am not sure how comparing against a value from 5 days ago will help. Twitter stock shot up 27% after Elon Musk disclosed his ownership stake on April 4[1]. Although the price has trended down since then, the stock is still trading roughly 14% higher than what it did on April 1 (The trading day before the announcement). [1] https://www.cnbc.com/2022/04/04/twitter-shares-soar-more-than-25percent-after-elon-musk-takes-9percent-stake-in-social-media-company.html https://www.cnbc.com/2022/04/04/twitter-shares-soar-more-tha...
        nightski 5y ago
        Right but I was under the impression the takeover bid was being discussed which happened in the last 48 hours, not his owning the stock in general. If the bid fails my guess is the stock will continue to decline. That's not what I would call an effective pump. If he wanted to pump he would just sold right away.
    - bostonsre 5y ago
      I would guess his intentions were noble and were based on what was best for humanity in the long run (e.g. spacex, tesla). Social media is a cesspool where the companies that own them have no incentive to clean them up because cleaning them up would cause them to lose money and affect shareholder value negatively. Taking it private would allow him to make the hard changes that would have a negative impact on short term profitability but be best for everyone in the long run.
  - whiplash451 5y ago
    That makes no sense to me. Elon is already the richest man in the world. What would be the need for a few extra billion dollars, at the cost of endless lawsuits? My intuition is that his plan is genuine. He is buying Twitter’s audience, not Twitter’s product.
    - White_Wolf 5y ago
      I'm not sure what standing anyone at T would have to sue him after a move made to counter him buying it... after he made a public offer like that. It would make perfect sense to just sell and go for plan B (buy through multiple people/off-shores or something).
- bdcravens 5y ago
  Are poison pills usually challenged successfully from someone with non-binding offers?
Mountain_Skies 5y ago
It'll be interesting to see who makes up the bulk of Twitter shareholders. If it's investors who would like to get a nice quick return on their investment and free up funds to use elsewhere, the Board is going to incur their wrath. But if it's mostly investors looking for long term growth and they believe Twitter can provide that, this would be a way of creating stability. The global economy is very volatile right now so it wouldn't be surprising if some investors weren't thrilled about the prospect of suddenly needing to find a new place to put their resources. But is Twitter itself really all that stable? Lots of new competitors are popping up, the reputation of the company is constantly taking a beating, and it doesn't appear to have much of a plan for generating stable cashflow, at least not at a level you'd want for its valuation. I expect at least a couple of investors to speak up loudly in opposition to this plan but have no idea if they'll be the majority.
- bo1024 5y ago
  This seems to be a rare situation where the externalities of the company are as big as the internalities. Investors with strong political preferences might take stances that conflict with their financial interest because of perceived political impact that Twitter has. Just a thought.
toephu2 5y ago
Wow, my prediction is Musk will walk away, Twitter stock price will tank, and Twitter will be flooded with thousands of shareholder lawsuits (for breaching their fiduciary duty).
- cloutchaser 5y ago
  That would be a fairly rational thing to do, but based on past behaviour I don’t think musk is one who backs down easily. It really depends how much he wants it, which only he knows.
  - bdcravens 5y ago
    Musk has made announcements before and backed off. I suppose the Muskboys will call that 4D chess, but at the end of the day, it has happened.
- bdcravens 5y ago
  Doesn't that make this a smart move then? If they rejected his offer, they'd be hit with the same lawsuits. In this case, they have a defense to say they were acting in the best interests of the shareholders if that causes Musk to back off.
  - gordon_freeman 5y ago
    If one thing you need to know about Musk is that he does not back off that easily. (He already mentioned in TED interview that he has a "Plan B" if this offer is rejected.)
    - bdcravens 5y ago
      Like when he was going to take Tesla private?
  - polski-g 5y ago
    The best interest of the shareholders at this point is to accept the offer. Its a 25% premium, quite typical for buyout offers.
WisNorCan 5y ago
Twitter reminds me a lot of Yahoo about a decade ago. A company that lost its way. Cycling through lots of CEOs, re-orgs and visions and a culture that atrophied along the way. Microsoft offered to buy Yahoo for $45B in 2008. The board of directors declined, believing in much more upside. Yahoo became increasingly irrelevant. They later sold to Verizon for $4.5B https://www.onmsft.com/news/its-finally-over-yahoo-is-acquired-not-by-microsoft-but-by-verizon https://www.onmsft.com/news/its-finally-over-yahoo-is-acquir...
- intsunny 5y ago
  No. Yahoo played that situation smartly. They knew they were worth more than the $45B Microsoft offered due to their stake in Alibaba. This thread dives into how Microsoft lowballed Yahoo: https://news.ycombinator.com/item?id=31029289 https://news.ycombinator.com/item?id=31029289
  - WisNorCan 5y ago
    No. Yahoo got lucky with the Alibaba stake. That wasn’t what Microsoft was after. Microsoft was desperate to be relevant in Internet consumer services and compete with Google. Yang and the board believed they could fix Yahoo. None of their predictions came true. —- “In an email to Yahoo employees after the board's rejection of the Microsoft offer was made public, Chief Executive Jerry Yang maintained that the company is well-positioned to grow, citing the Internet powerhouse's efforts to improve its standing in online advertising and build an alliance with newspapers. "We have accomplished a great deal in a very short time," Yang said. "Yahoo is a faster-moving, better-organized, more nimble company well on its way to transforming the experiences of its users, advertisers, publishers and developers." He said the company aims to "grow visits to key Yahoo starting points and properties by approximately 15% per year over the next several years." https://www.marketwatch.com/amp/story/yahoo-rejects-bid-microsoft-vows-to-continue-effort https://www.marketwatch.com/amp/story/yahoo-rejects-bid-micr...
    - snotrockets 5y ago
      There's a difference between what the board believed (we'll probably never know,) and what they communicated. No one would email their workers saying "we're waiting for payday, at the expense of you".
tonetheman 5y ago
This is good. He had no real plan to help the company anyway. Twitter does not need a part-time CEO.
- MangoCoffee 5y ago
  he doesn't have to run Twitter. he can leave it to someone whom he trust like Gwynne Shotwell w/SpaceX. it work perfectly for SpaceX.
- dijonman2 5y ago
  Someone needs to change the culture there, get the egotistical censors out of the company.
- whiplash451 5y ago
  I’d trade 20% of Elon for 100% of the vast majority of CEOs in an eyeblink.
- jdminhbg 5y ago
  > Twitter does not need a part-time CEO. It had one in Jack for a long time. But more to the point, did Elon ever propose becoming CEO? I don't believe I ever saw anything from him to that effect.
bestbuyer__ 5y ago
I guess Musk will have to go with Plan B, then. I would guess he will start his own Twitter competitor much like Trump did with Truth Social, and he has the star power to actually create the network effects needed to bootstrap a new social network. In addition to him selling his current 9% share of the company, this is likely very bearish for Twitter's stock price.
- bdcravens 5y ago
  Trump had enough star power to get some 75 million people to vote for him, and Truth Social has been a flop.
  - upsidesinclude 5y ago
    This should be sufficient evidence that the rhetoric about legions of vitriolic, idiotic "Trumpers" is just progressive propaganda...
    - bdcravens 5y ago
      Could also mean that group isn't one you can build a successful product around, even if they do exist.
  - jcadam 5y ago
    Truth Social appears to be stillborn mostly due to technical incompetence. Otherwise, it might have been at least somewhat successful in crowding out the gabs, gettrs, etc. I believe Musk would hire the proper talent and wouldn't screw up a launch this badly.
    - bdcravens 5y ago
      Perhaps but you're talking a year or more of building. Also, while there are plenty of Muskboys on HN, I don't think he has the star power that guarantees success, so it'd have to be something more than just "Twitter without moderation", resulting in a pretty long lead time to alpha v1. More likely he would just buy a different platform, since many of his companies he hasn't created from the ground up.
browserman 5y ago
The most bizarre part of this whole saga has been the legions of online commentators who evidently take Elon at his word when he says he is trying operate in the public interest, or that his actual aims are what he says they are. It seems patently obvious to me that all of the actions he's taken over the entire time he's been in the public eye have shown him to be an incredibly vindictive egomaniac and serial liar interested only in his own aggrandizement. I find the apparently deep well of credibility he has with the public to be completely baffling.
- koolba 5y ago
  > It seems patently obvious to me that all of the actions he's taken over the entire time he's been in the public eye have shown him to be an incredibly vindictive egomaniac and serial liar interested only in his own aggrandizement. I still think the world, and the USA in particular, would be better with him at the helm than the current biased leadership. Would be more fun too!
  - JasonFruit 5y ago
    He's a vindictive egomaniac and serial liar with a sense of fun, a good dose of perspective, and a ton of panache. I might not trust him, but he's great entertainment.
    - tsol 5y ago
      I think people exaggerate about him way too much in each direction. He's not the smartest man alive, and he isn't a fraud on par with Elizabeth Holmes. He's a businessperson who's clever at times and childish at times, like most people. I have yet to see a politician or company head that is infallible. All that being said I don't think he'd make a great politician-- just because you're a brilliant engineer doesn't mean you're gonna know how to run a country
      - JasonFruit 5y ago
        I think he appeals to the people who want him as a politician for the same reason Trump appealed to his supporters: they're dissatisfied with politics as usual, they want change at almost any cost, and he's a middle finger at the people they dislike. That's not good justification for a gamble with the whole country, but these people see it as time for a Hail Mary. Sometimes I feel that way too; then I put down my phone and take a walk.
jwlake 5y ago
Has anyone found the filing running around on the internet and not just the pr dump? The interesting missing bit is the price set on these. "to purchase, at the then-current exercise price, additional shares of common stock having a then-current market value of twice the exercise price of the right"
- exogenousdata 5y ago
  It’s a US federal holiday. The filing won’t be posted to SEC’s EDGAR system[0] until Monday morning. However this press release was posted on Twitter’s official Investor Relations feed[1]. So it’s probably fair to treat it as gospel. [0] - https://www.sec.gov/edgar/browse/?CIK=1418091&owner=exclude https://www.sec.gov/edgar/browse/?CIK=1418091&owner=exclude [1] - https://twitter.com/TwitterIR/status/1515001122603388928?s=20&t=szkR2Y6a84cD7zJIpXEBvg https://twitter.com/TwitterIR/status/1515001122603388928?s=2...
  - gatonegro 5y ago
    > The filing won’t be posted to SEC’s EDGAR system[0] until Monday morning. Is this[0] the filing you're referring to? Don't know the first thing about the SEC, filings, or any of that, but Musk shared[1] this link yesterday. [0] https://www.sec.gov/Archives/edgar/data/0001418091/000110465922045641/tm2212748d1_sc13da.htm https://www.sec.gov/Archives/edgar/data/0001418091/000110465... [1] https://twitter.com/elonmusk/status/1514564966564651008 https://twitter.com/elonmusk/status/1514564966564651008
coolso 5y ago
Excellent! I’m sure that Saudi Arabian prince (who the media and its followers have been citing ad nauseum for some strange reason as to why Twitter shouldn’t accept the offer) will be very happy now. Because, you know. A Saudi Arabian prince is who we should be listening to when it comes to American policies, companies, and institutions.
- jjulius 5y ago
  >... for some strange reason... I mean, he's a shareholder who owns 5.2% of Twitter. Not so "strange".
  - propogandist 5y ago
    based on this Bloomberg[?] screen he has no positions in Twitter as of 2019 https://twitter.com/zerohedge/status/1514747126210863108 https://twitter.com/zerohedge/status/1514747126210863108
coolso 5y ago
- tonguez 5y ago
  there's nothing progressive about corporate censorship; twitter is just a tool to manufacture consent for war profiteering
- dijonman2 5y ago
  I wish I could upvote this twice. You’re spot on.
- dimgl 5y ago
  Yeah it's truly baffling. I saw a comment the other day (here, on Hacker News) about a hypothetical situation where Musk starts banning accounts that have pronouns (like he/him) in their bio if he gets to run Twitter. This wouldn't have even crossed my mind, to be honest. In my opinion there's a surprising level of projection and self-awareness here. These thoughts are just that: hypotheticals. We don't know what's going to happen. But it's undeniable Twitter is a bad state right now. Edit: you're definitely going to get downvoted, but IMO it's the only reasonable take I've seen on here.
- jacques_chester 5y ago
  - dang 5y ago
    Would you please not post dreck like this to HN, regardless of how bad another comment is or you feel it is? I mean come on. You've been here long enough to realize perfectly well how much against the intended use of HN this is, and I think you should be setting a much better example for newer users. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
    - jacques_chester 5y ago
      It's a fair cop.
mimikatz 5y ago
This seems to be a clear case of management working against shareholders. Twitter stock has gone nowhere since IPO 10 years ago. 10 years of no dividends and no appreciation in value. Elon is offering a decent premium on the current price and its pretty obvious if he walks away it will return to the old price. Who does a poison pill help and protect? Current management who have attached themselves to a company, this doesn't help the people invested in the company or the people with stock ownership. All these comments are outside if it would be good or bad if Elon owned it, that shouldn't be an investors concern.
- berberous 5y ago
  To be fair, Jack finally stepped down in November and Parag replaced him as CEO. So there is new management that hasn’t really had time to shine or fail yet.
- rurp 5y ago
  That's assuming it's a real offer. There is a very high chance that even if the board accepted the offer Elon would back out, which would be a mess that would harm the company. It's clear that trolling is a big part of this (I would say the entire purpose). He doesn't even have funding lined up and doesn't have a real plan for how to run the company beyond vague aspirational statements.
  - vishnugupta 5y ago
    > Elon would back out.... He doesn't even have funding lined up Can one just walk up to SEC and file an offer to buy out a company all-cash without showing some evidence of how they plan to arrange the money? Isn't there an entry barrier? Also, shouldn't there be a clause to penalise backing out? If not then one could toy around with the share prices as you say, no?
  - pclmulqdq 5y ago
    That's not how this sort of thing works. Musk can't back out of this without paying a tremendous sum to the current shareholders. This isn't like a private company acquisition where there is an extended due diligence where anything can come up. He has very few options to cancel the purchase if it is accepted.
cloutchaser 5y ago
Considering what Musks reputation is for creating shareholder value, and the meme power he has, at some point existing shareholders could get really pissed at the board if they are sabotaging a really big payoff. Unless of course there are some back room political games going on, which wouldn’t surprise me.
whiplash451 5y ago
Well, Twitter is definitely « what's happening and what people are talking about right now. »
torgoguys 5y ago
If I read this correctly, basically if someone acquires 15% of the stock, then all of the other shareholders have to option to buy more stock at half-price. Is that correct? Where do these shares come from--are they just considered newly minted shares? If so, couldn't something like this backfire or otherwise be circumvented? You're Musk and you want Twitter so you've started by buying 10% of the stock. Can't you just setup several shell companies, each of them also buying significant stakes each (say, 10% each). You're still going to eventually get enough to gain control... Heck, you could even then trigger the right outlined here by having Musk go over 15% and exercise your 100% of your rights in shell companies, potentially diluting other shareholder's overall stake in the company since not 100% of them will exercise the right (although I suppose that would be a bad/expensive idea if these share newly-minted shares). (???)
- berberous 5y ago
  Do you really think these poison pills are not thought through? Yes, they are newly minted shares. The poison pill applies to any person, entity or group. If Elon has other shell companies, or even just people acting in concert with him, they are all excluded from the right to buy. They all get diluted.
  - pzh 5y ago
    Doesn’t that assume that Twitter actually knows that Elon is behind them? They could simply be other investors who have already decided to sell to Elon.
    - berberous 5y ago
      Sure, but that would be illegal and won’t happen. The SEC has filing requirements and the poison pill, if triggered, probably requires certain representations to be made (e.g. the buyer of the newly minted shares does not hold more than X% when aggregated with anyone they are acting in concert with).
  - SilasX 5y ago
    But then he can just keep on buying those shares secondhand, right? (Or, since they’re fungible, “buy more shares”.)
MangoCoffee 5y ago
many of you said its pump and dump. i'll like to know how. Twitter price chart shown its been on decline. it got a pump from the news that Elon bought 9%. do you believe the stock going up with Twitter's poison pill? unless Elon is looking for a tax write off. is he going to sell for less?
sudden_dystopia 5y ago
The poison pill. This is going be super interesting to watch play out. Pretty much eliminates the hostile takeover from being feasible unless they want to bury many more billions to get it done. But Twitter is going to get their butts sued left and right for breaching fiduciary duty to stockholders.
klipklop 5y ago
To me it's pretty clear that certain members of the elite be are willing to lose money to wield the power a mass communication platform like Twitter gives them. The current folks that have control of Twitter appear to have politics and an agenda that runs counter to somebody like Musk. Would they rather run Twitter into the ground than allow a rival to take control of it? I am guessing yes. Twitter/Reddit/Facebook/YouTube and other mass media platforms are the key way the worlds elite deliver their flavor of 'marketing'/spin to the world to influence and change public opinion. These are not areas of free exchanges of ideas and open thought. "Private platform," etc. It's yellow journalism 2.0 for the most part, but with clever addictive dark patterns tossed in. Anybody that disagrees gets the ban-hammer or is "de-boosted" into oblivion.
- Rapzid 5y ago
  How are Twitters current leaders subverting it to push their agenda exactly? In any case, I think it's more likely they are blocking a hostile takeover in order to dictate more favorable terms. Otherwise Musk could orchestrate snatching up all the shares at current market value right?
  - tsimionescu 5y ago
    > Otherwise Musk could orchestrate snatching up all the shares at current market value right? Not anymore, given the decision in this article. If he (or anyone else) acquires more than 15% of current shares, all current shareholders will be given an automatic option to buy more shares.
  - klipklop 5y ago
    Trying to avoid being overly political, but how about banning a former US president? Trump has not yet (maybe he will one day?) been found guilty of any crime regarding the whole Jan 6 debacle. Yet we saw the accounts of Taliban members (who without a doubt took over a democratically elected government) and other nefarious folks still have their accounts up and active. Musk's bid was significantly over market value ($54.20) and above Goldman Sach's price target of $30. From my external viewpoint Twitter has a heavy political bias. As said by the current CEO: >“Where our role is particularly emphasized is who can be heard,” he went on. “And so increasingly our role is moving towards how we recommend content … how we direct people’s attention.” Dorsey I felt at times always tried to do the right thing. Not so sure about the current leadership. One has to assume if Musk was able to take over the company Parag Agrawal would be out very quickly. Twitter is not a neutral platform. It's funny how you never hear a Twitter insider ever defend or explain why the site appears to be so heavily internally manipulated. If the "wrong" thing hits the trending section it quickly drops off. Was it always just luck that the same 2-3 accounts were always the same top replies to anything Trump posted. Is this organic? Would love to know. Accounts like "Brooklyn Dad Defiant" was shown to have taken money from one particular political party. I recall seeing that guy almost always as the first reply to Trump's ramblings. How was his account boosted to such an extent? Seems fishy. Twitter's annoying dark patterns when it comes to viewing the site without logging in is the main reason why I avoid it more so than some political issue.
jazzyjackson 5y ago
Elon apparently lined up his offer with a talk at TED: https://blog.ted.com/elon-musk-talks-twitter-tesla-and-the-future-at-ted2022/ https://blog.ted.com/elon-musk-talks-twitter-tesla-and-the-f... Interesting war-of-words going on among the twittizens, many people fearful over a platform where their ideological enemies aren't banned, many free-speech-maximalists getting the champagne bottles ready. Personally my move was a small position in $DOGE in hopes that it becomes the micro-tipping standard, but I don't know that it really has the TPS for that. I do think Twitter could be much more valuable then it is with better self-moderation tools so that you're not exposed to the trolls, bots, and culture wars if you don't want to see it. Let people tweak their filters and share blocklists, that kind of thing. There's so much panic about letting people speak freely, but really the danger is algorithms rolling dice on what accounts to amplify. Just show me what my network is talking about and stop injecting "what's popular" into my feed.
- mwint 5y ago
  TPS?
  - defen 5y ago
    Transactions Per Second
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anonymousiam 5y ago
Good analysis here: https://redstate.com/brandon_morse/2022/04/15/a-new-player-enters-the-arena-in-the-fight-to-keep-elon-musk-from-buying-twitter-n550749 https://redstate.com/brandon_morse/2022/04/15/a-new-player-e...
mzs 5y ago
>Buyout firm Thoma Bravo approaches Twitter with acquisition interest https://www.reuters.com/technology/buyout-firm-thoma-bravo-approaches-twitter-with-acquisition-interest-2022-04-15/ https://www.reuters.com/technology/buyout-firm-thoma-bravo-a...

100 points by minimaxir 5y ago

dang 5y ago

Related ongoing thread: Twitter board adopts poison pill after Musk’s $43B bid to buy company - https://news.ycombinator.com/item?id=31043439 https://news.ycombinator.com/item?id=31043439 - April 2022 (286 comments)

minimaxir 5y ago

This is most likely a "poison pill" enacted to prevent Elon Musk from successfully performing a hostile takeover. https://www.axios.com/twitter-elon-musk-poison-pill-7a62f6d6-b77a-4481-a2e3-5a7081557a84.html https://www.axios.com/twitter-elon-musk-poison-pill-7a62f6d6...

zrail 5y ago
This is the very definition of a corporate poison pill.

aww_dang 5y ago

What happens next here? Elon's lawyers fire back and challenge this?

david927 5y ago
I think the threat is that he dumps his entire position and craters the stock price.
- bdcravens 5y ago
  Good chance his goal was a pump and dump. So far it's working.
  - nightski 5y ago
    That makes no sense because it hasn't really pumped. Stock price is basically where it was 5 days ago.
    - bestbuyer__ 5y ago
      Look at where it was a month ago.
      - MangoCoffee 5y ago
        it wen up after the news break about Elon bought 9%.
    - phoe18 5y ago
      I am not sure how comparing against a value from 5 days ago will help. Twitter stock shot up 27% after Elon Musk disclosed his ownership stake on April 4[1]. Although the price has trended down since then, the stock is still trading roughly 14% higher than what it did on April 1 (The trading day before the announcement). [1] https://www.cnbc.com/2022/04/04/twitter-shares-soar-more-than-25percent-after-elon-musk-takes-9percent-stake-in-social-media-company.html https://www.cnbc.com/2022/04/04/twitter-shares-soar-more-tha...
      - nightski 5y ago
        Right but I was under the impression the takeover bid was being discussed which happened in the last 48 hours, not his owning the stock in general. If the bid fails my guess is the stock will continue to decline. That's not what I would call an effective pump. If he wanted to pump he would just sold right away.
  - bostonsre 5y ago
    I would guess his intentions were noble and were based on what was best for humanity in the long run (e.g. spacex, tesla). Social media is a cesspool where the companies that own them have no incentive to clean them up because cleaning them up would cause them to lose money and affect shareholder value negatively. Taking it private would allow him to make the hard changes that would have a negative impact on short term profitability but be best for everyone in the long run.
- whiplash451 5y ago
  That makes no sense to me. Elon is already the richest man in the world. What would be the need for a few extra billion dollars, at the cost of endless lawsuits? My intuition is that his plan is genuine. He is buying Twitter’s audience, not Twitter’s product.
  - White_Wolf 5y ago
    I'm not sure what standing anyone at T would have to sue him after a move made to counter him buying it... after he made a public offer like that. It would make perfect sense to just sell and go for plan B (buy through multiple people/off-shores or something).
bdcravens 5y ago
Are poison pills usually challenged successfully from someone with non-binding offers?

Mountain_Skies 5y ago

It'll be interesting to see who makes up the bulk of Twitter shareholders. If it's investors who would like to get a nice quick return on their investment and free up funds to use elsewhere, the Board is going to incur their wrath. But if it's mostly investors looking for long term growth and they believe Twitter can provide that, this would be a way of creating stability. The global economy is very volatile right now so it wouldn't be surprising if some investors weren't thrilled about the prospect of suddenly needing to find a new place to put their resources. But is Twitter itself really all that stable? Lots of new competitors are popping up, the reputation of the company is constantly taking a beating, and it doesn't appear to have much of a plan for generating stable cashflow, at least not at a level you'd want for its valuation. I expect at least a couple of investors to speak up loudly in opposition to this plan but have no idea if they'll be the majority.

bo1024 5y ago
This seems to be a rare situation where the externalities of the company are as big as the internalities. Investors with strong political preferences might take stances that conflict with their financial interest because of perceived political impact that Twitter has. Just a thought.

toephu2 5y ago

Wow, my prediction is Musk will walk away, Twitter stock price will tank, and Twitter will be flooded with thousands of shareholder lawsuits (for breaching their fiduciary duty).

cloutchaser 5y ago
That would be a fairly rational thing to do, but based on past behaviour I don’t think musk is one who backs down easily. It really depends how much he wants it, which only he knows.
- bdcravens 5y ago
  Musk has made announcements before and backed off. I suppose the Muskboys will call that 4D chess, but at the end of the day, it has happened.
bdcravens 5y ago
Doesn't that make this a smart move then? If they rejected his offer, they'd be hit with the same lawsuits. In this case, they have a defense to say they were acting in the best interests of the shareholders if that causes Musk to back off.
- gordon_freeman 5y ago
  If one thing you need to know about Musk is that he does not back off that easily. (He already mentioned in TED interview that he has a "Plan B" if this offer is rejected.)
  - bdcravens 5y ago
    Like when he was going to take Tesla private?
- polski-g 5y ago
  The best interest of the shareholders at this point is to accept the offer. Its a 25% premium, quite typical for buyout offers.

WisNorCan 5y ago

Twitter reminds me a lot of Yahoo about a decade ago. A company that lost its way. Cycling through lots of CEOs, re-orgs and visions and a culture that atrophied along the way. Microsoft offered to buy Yahoo for $45B in 2008. The board of directors declined, believing in much more upside. Yahoo became increasingly irrelevant. They later sold to Verizon for $4.5B https://www.onmsft.com/news/its-finally-over-yahoo-is-acquired-not-by-microsoft-but-by-verizon https://www.onmsft.com/news/its-finally-over-yahoo-is-acquir...

intsunny 5y ago
No. Yahoo played that situation smartly. They knew they were worth more than the $45B Microsoft offered due to their stake in Alibaba. This thread dives into how Microsoft lowballed Yahoo: https://news.ycombinator.com/item?id=31029289 https://news.ycombinator.com/item?id=31029289
- WisNorCan 5y ago
  No. Yahoo got lucky with the Alibaba stake. That wasn’t what Microsoft was after. Microsoft was desperate to be relevant in Internet consumer services and compete with Google. Yang and the board believed they could fix Yahoo. None of their predictions came true. —- “In an email to Yahoo employees after the board's rejection of the Microsoft offer was made public, Chief Executive Jerry Yang maintained that the company is well-positioned to grow, citing the Internet powerhouse's efforts to improve its standing in online advertising and build an alliance with newspapers. "We have accomplished a great deal in a very short time," Yang said. "Yahoo is a faster-moving, better-organized, more nimble company well on its way to transforming the experiences of its users, advertisers, publishers and developers." He said the company aims to "grow visits to key Yahoo starting points and properties by approximately 15% per year over the next several years." https://www.marketwatch.com/amp/story/yahoo-rejects-bid-microsoft-vows-to-continue-effort https://www.marketwatch.com/amp/story/yahoo-rejects-bid-micr...
  - snotrockets 5y ago
    There's a difference between what the board believed (we'll probably never know,) and what they communicated. No one would email their workers saying "we're waiting for payday, at the expense of you".

tonetheman 5y ago

This is good. He had no real plan to help the company anyway. Twitter does not need a part-time CEO.

MangoCoffee 5y ago
he doesn't have to run Twitter. he can leave it to someone whom he trust like Gwynne Shotwell w/SpaceX. it work perfectly for SpaceX.
dijonman2 5y ago
Someone needs to change the culture there, get the egotistical censors out of the company.
whiplash451 5y ago
I’d trade 20% of Elon for 100% of the vast majority of CEOs in an eyeblink.
jdminhbg 5y ago
> Twitter does not need a part-time CEO. It had one in Jack for a long time. But more to the point, did Elon ever propose becoming CEO? I don't believe I ever saw anything from him to that effect.

bestbuyer__ 5y ago

I guess Musk will have to go with Plan B, then. I would guess he will start his own Twitter competitor much like Trump did with Truth Social, and he has the star power to actually create the network effects needed to bootstrap a new social network. In addition to him selling his current 9% share of the company, this is likely very bearish for Twitter's stock price.

bdcravens 5y ago
Trump had enough star power to get some 75 million people to vote for him, and Truth Social has been a flop.
- upsidesinclude 5y ago
  This should be sufficient evidence that the rhetoric about legions of vitriolic, idiotic "Trumpers" is just progressive propaganda...
  - bdcravens 5y ago
    Could also mean that group isn't one you can build a successful product around, even if they do exist.
- jcadam 5y ago
  Truth Social appears to be stillborn mostly due to technical incompetence. Otherwise, it might have been at least somewhat successful in crowding out the gabs, gettrs, etc. I believe Musk would hire the proper talent and wouldn't screw up a launch this badly.
  - bdcravens 5y ago
    Perhaps but you're talking a year or more of building. Also, while there are plenty of Muskboys on HN, I don't think he has the star power that guarantees success, so it'd have to be something more than just "Twitter without moderation", resulting in a pretty long lead time to alpha v1. More likely he would just buy a different platform, since many of his companies he hasn't created from the ground up.

browserman 5y ago

The most bizarre part of this whole saga has been the legions of online commentators who evidently take Elon at his word when he says he is trying operate in the public interest, or that his actual aims are what he says they are. It seems patently obvious to me that all of the actions he's taken over the entire time he's been in the public eye have shown him to be an incredibly vindictive egomaniac and serial liar interested only in his own aggrandizement. I find the apparently deep well of credibility he has with the public to be completely baffling.

koolba 5y ago
> It seems patently obvious to me that all of the actions he's taken over the entire time he's been in the public eye have shown him to be an incredibly vindictive egomaniac and serial liar interested only in his own aggrandizement. I still think the world, and the USA in particular, would be better with him at the helm than the current biased leadership. Would be more fun too!
- JasonFruit 5y ago
  He's a vindictive egomaniac and serial liar with a sense of fun, a good dose of perspective, and a ton of panache. I might not trust him, but he's great entertainment.
  - tsol 5y ago
    I think people exaggerate about him way too much in each direction. He's not the smartest man alive, and he isn't a fraud on par with Elizabeth Holmes. He's a businessperson who's clever at times and childish at times, like most people. I have yet to see a politician or company head that is infallible. All that being said I don't think he'd make a great politician-- just because you're a brilliant engineer doesn't mean you're gonna know how to run a country
    - JasonFruit 5y ago
      I think he appeals to the people who want him as a politician for the same reason Trump appealed to his supporters: they're dissatisfied with politics as usual, they want change at almost any cost, and he's a middle finger at the people they dislike. That's not good justification for a gamble with the whole country, but these people see it as time for a Hail Mary. Sometimes I feel that way too; then I put down my phone and take a walk.

jwlake 5y ago

Has anyone found the filing running around on the internet and not just the pr dump? The interesting missing bit is the price set on these. "to purchase, at the then-current exercise price, additional shares of common stock having a then-current market value of twice the exercise price of the right"

exogenousdata 5y ago
It’s a US federal holiday. The filing won’t be posted to SEC’s EDGAR system[0] until Monday morning. However this press release was posted on Twitter’s official Investor Relations feed[1]. So it’s probably fair to treat it as gospel. [0] - https://www.sec.gov/edgar/browse/?CIK=1418091&owner=exclude https://www.sec.gov/edgar/browse/?CIK=1418091&owner=exclude [1] - https://twitter.com/TwitterIR/status/1515001122603388928?s=20&t=szkR2Y6a84cD7zJIpXEBvg https://twitter.com/TwitterIR/status/1515001122603388928?s=2...
- gatonegro 5y ago
  > The filing won’t be posted to SEC’s EDGAR system[0] until Monday morning. Is this[0] the filing you're referring to? Don't know the first thing about the SEC, filings, or any of that, but Musk shared[1] this link yesterday. [0] https://www.sec.gov/Archives/edgar/data/0001418091/000110465922045641/tm2212748d1_sc13da.htm https://www.sec.gov/Archives/edgar/data/0001418091/000110465... [1] https://twitter.com/elonmusk/status/1514564966564651008 https://twitter.com/elonmusk/status/1514564966564651008

coolso 5y ago

Excellent! I’m sure that Saudi Arabian prince (who the media and its followers have been citing ad nauseum for some strange reason as to why Twitter shouldn’t accept the offer) will be very happy now. Because, you know. A Saudi Arabian prince is who we should be listening to when it comes to American policies, companies, and institutions.

jjulius 5y ago
>... for some strange reason... I mean, he's a shareholder who owns 5.2% of Twitter. Not so "strange".
- propogandist 5y ago
  based on this Bloomberg[?] screen he has no positions in Twitter as of 2019 https://twitter.com/zerohedge/status/1514747126210863108 https://twitter.com/zerohedge/status/1514747126210863108

coolso 5y ago

tonguez 5y ago
there's nothing progressive about corporate censorship; twitter is just a tool to manufacture consent for war profiteering
dijonman2 5y ago
I wish I could upvote this twice. You’re spot on.
dimgl 5y ago
Yeah it's truly baffling. I saw a comment the other day (here, on Hacker News) about a hypothetical situation where Musk starts banning accounts that have pronouns (like he/him) in their bio if he gets to run Twitter. This wouldn't have even crossed my mind, to be honest. In my opinion there's a surprising level of projection and self-awareness here. These thoughts are just that: hypotheticals. We don't know what's going to happen. But it's undeniable Twitter is a bad state right now. Edit: you're definitely going to get downvoted, but IMO it's the only reasonable take I've seen on here.
jacques_chester 5y ago
- dang 5y ago
  Would you please not post dreck like this to HN, regardless of how bad another comment is or you feel it is? I mean come on. You've been here long enough to realize perfectly well how much against the intended use of HN this is, and I think you should be setting a much better example for newer users. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
  - jacques_chester 5y ago
    It's a fair cop.

mimikatz 5y ago

This seems to be a clear case of management working against shareholders. Twitter stock has gone nowhere since IPO 10 years ago. 10 years of no dividends and no appreciation in value. Elon is offering a decent premium on the current price and its pretty obvious if he walks away it will return to the old price. Who does a poison pill help and protect? Current management who have attached themselves to a company, this doesn't help the people invested in the company or the people with stock ownership. All these comments are outside if it would be good or bad if Elon owned it, that shouldn't be an investors concern.

berberous 5y ago
To be fair, Jack finally stepped down in November and Parag replaced him as CEO. So there is new management that hasn’t really had time to shine or fail yet.
rurp 5y ago
That's assuming it's a real offer. There is a very high chance that even if the board accepted the offer Elon would back out, which would be a mess that would harm the company. It's clear that trolling is a big part of this (I would say the entire purpose). He doesn't even have funding lined up and doesn't have a real plan for how to run the company beyond vague aspirational statements.
- vishnugupta 5y ago
  > Elon would back out.... He doesn't even have funding lined up Can one just walk up to SEC and file an offer to buy out a company all-cash without showing some evidence of how they plan to arrange the money? Isn't there an entry barrier? Also, shouldn't there be a clause to penalise backing out? If not then one could toy around with the share prices as you say, no?
- pclmulqdq 5y ago
  That's not how this sort of thing works. Musk can't back out of this without paying a tremendous sum to the current shareholders. This isn't like a private company acquisition where there is an extended due diligence where anything can come up. He has very few options to cancel the purchase if it is accepted.

cloutchaser 5y ago

Considering what Musks reputation is for creating shareholder value, and the meme power he has, at some point existing shareholders could get really pissed at the board if they are sabotaging a really big payoff. Unless of course there are some back room political games going on, which wouldn’t surprise me.

whiplash451 5y ago

Well, Twitter is definitely « what's happening and what people are talking about right now. »

torgoguys 5y ago

If I read this correctly, basically if someone acquires 15% of the stock, then all of the other shareholders have to option to buy more stock at half-price. Is that correct? Where do these shares come from--are they just considered newly minted shares? If so, couldn't something like this backfire or otherwise be circumvented? You're Musk and you want Twitter so you've started by buying 10% of the stock. Can't you just setup several shell companies, each of them also buying significant stakes each (say, 10% each). You're still going to eventually get enough to gain control... Heck, you could even then trigger the right outlined here by having Musk go over 15% and exercise your 100% of your rights in shell companies, potentially diluting other shareholder's overall stake in the company since not 100% of them will exercise the right (although I suppose that would be a bad/expensive idea if these share newly-minted shares). (???)

berberous 5y ago
Do you really think these poison pills are not thought through? Yes, they are newly minted shares. The poison pill applies to any person, entity or group. If Elon has other shell companies, or even just people acting in concert with him, they are all excluded from the right to buy. They all get diluted.
- pzh 5y ago
  Doesn’t that assume that Twitter actually knows that Elon is behind them? They could simply be other investors who have already decided to sell to Elon.
  - berberous 5y ago
    Sure, but that would be illegal and won’t happen. The SEC has filing requirements and the poison pill, if triggered, probably requires certain representations to be made (e.g. the buyer of the newly minted shares does not hold more than X% when aggregated with anyone they are acting in concert with).
- SilasX 5y ago
  But then he can just keep on buying those shares secondhand, right? (Or, since they’re fungible, “buy more shares”.)

MangoCoffee 5y ago

many of you said its pump and dump. i'll like to know how. Twitter price chart shown its been on decline. it got a pump from the news that Elon bought 9%. do you believe the stock going up with Twitter's poison pill? unless Elon is looking for a tax write off. is he going to sell for less?

sudden_dystopia 5y ago

The poison pill. This is going be super interesting to watch play out. Pretty much eliminates the hostile takeover from being feasible unless they want to bury many more billions to get it done. But Twitter is going to get their butts sued left and right for breaching fiduciary duty to stockholders.

klipklop 5y ago

To me it's pretty clear that certain members of the elite be are willing to lose money to wield the power a mass communication platform like Twitter gives them. The current folks that have control of Twitter appear to have politics and an agenda that runs counter to somebody like Musk. Would they rather run Twitter into the ground than allow a rival to take control of it? I am guessing yes. Twitter/Reddit/Facebook/YouTube and other mass media platforms are the key way the worlds elite deliver their flavor of 'marketing'/spin to the world to influence and change public opinion. These are not areas of free exchanges of ideas and open thought. "Private platform," etc. It's yellow journalism 2.0 for the most part, but with clever addictive dark patterns tossed in. Anybody that disagrees gets the ban-hammer or is "de-boosted" into oblivion.

Rapzid 5y ago
How are Twitters current leaders subverting it to push their agenda exactly? In any case, I think it's more likely they are blocking a hostile takeover in order to dictate more favorable terms. Otherwise Musk could orchestrate snatching up all the shares at current market value right?
- tsimionescu 5y ago
  > Otherwise Musk could orchestrate snatching up all the shares at current market value right? Not anymore, given the decision in this article. If he (or anyone else) acquires more than 15% of current shares, all current shareholders will be given an automatic option to buy more shares.
- klipklop 5y ago
  Trying to avoid being overly political, but how about banning a former US president? Trump has not yet (maybe he will one day?) been found guilty of any crime regarding the whole Jan 6 debacle. Yet we saw the accounts of Taliban members (who without a doubt took over a democratically elected government) and other nefarious folks still have their accounts up and active. Musk's bid was significantly over market value ($54.20) and above Goldman Sach's price target of $30. From my external viewpoint Twitter has a heavy political bias. As said by the current CEO: >“Where our role is particularly emphasized is who can be heard,” he went on. “And so increasingly our role is moving towards how we recommend content … how we direct people’s attention.” Dorsey I felt at times always tried to do the right thing. Not so sure about the current leadership. One has to assume if Musk was able to take over the company Parag Agrawal would be out very quickly. Twitter is not a neutral platform. It's funny how you never hear a Twitter insider ever defend or explain why the site appears to be so heavily internally manipulated. If the "wrong" thing hits the trending section it quickly drops off. Was it always just luck that the same 2-3 accounts were always the same top replies to anything Trump posted. Is this organic? Would love to know. Accounts like "Brooklyn Dad Defiant" was shown to have taken money from one particular political party. I recall seeing that guy almost always as the first reply to Trump's ramblings. How was his account boosted to such an extent? Seems fishy. Twitter's annoying dark patterns when it comes to viewing the site without logging in is the main reason why I avoid it more so than some political issue.

jazzyjackson 5y ago

Elon apparently lined up his offer with a talk at TED: https://blog.ted.com/elon-musk-talks-twitter-tesla-and-the-future-at-ted2022/ https://blog.ted.com/elon-musk-talks-twitter-tesla-and-the-f... Interesting war-of-words going on among the twittizens, many people fearful over a platform where their ideological enemies aren't banned, many free-speech-maximalists getting the champagne bottles ready. Personally my move was a small position in $DOGE in hopes that it becomes the micro-tipping standard, but I don't know that it really has the TPS for that. I do think Twitter could be much more valuable then it is with better self-moderation tools so that you're not exposed to the trolls, bots, and culture wars if you don't want to see it. Let people tweak their filters and share blocklists, that kind of thing. There's so much panic about letting people speak freely, but really the danger is algorithms rolling dice on what accounts to amplify. Just show me what my network is talking about and stop injecting "what's popular" into my feed.

mwint 5y ago
TPS?
- defen 5y ago
  Transactions Per Second

deleted 5y ago

[deleted]

anonymousiam 5y ago

Good analysis here: https://redstate.com/brandon_morse/2022/04/15/a-new-player-enters-the-arena-in-the-fight-to-keep-elon-musk-from-buying-twitter-n550749 https://redstate.com/brandon_morse/2022/04/15/a-new-player-e...

mzs 5y ago

>Buyout firm Thoma Bravo approaches Twitter with acquisition interest https://www.reuters.com/technology/buyout-firm-thoma-bravo-approaches-twitter-with-acquisition-interest-2022-04-15/ https://www.reuters.com/technology/buyout-firm-thoma-bravo-a...