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Given that it’s at a share price premium for 90%+ of the lifetime of the stock since IPO, yes. Most shares were bought below the price Musk is asking.
by nickysielicki 5y ago
Given that it’s at a share price premium for 90%+ of the lifetime of the stock since IPO, yes. Most shares were bought below the price Musk is asking.
- gobengo 5y agoit's radical to equate dollar values with objective goodness
- iancmceachern 5y agoExactly. Profit does not always equal good. One of my favorite books: "Small giants, companies that choose to be great instead of big"
- tsimionescu 5y agoFiduciary duty, such as it is, only extends to dollar value; and there is no other criteria to sue the board over. Note that I'm all for companies having much more legal responsibility to other stakeholders, not just shareholders, but that is somewhat irrelevant for a discussion of whether the board could be successfully sued over adopting this decision.
- dasil003 5y agoTrue, but the GP's phrasing of "equate dollar values" implies a sort of cut and dried interpretation. A mechanical calculation of a short-term price snapshot is not the only thing that matters. If the board has good reason to believe that Musk will be bad for the stock price in the long-term then there wouldn't be any breach of fiduciary duty.
- tsimionescu 5y agoThat's not exactly true, as Musk's offer is to buy the company outright, making it private (and thus buying out all shareholders), as I understand - so there is no concept of how Musk's ownership would affect the stock price. Still, the board can easily argue "we believe shareholders will be able to achieve higher profits in the future by maintaining their ownership than by selling all stock at Musk's offered price today".
- bradleybuda 5y agoHe claims that he wants to “retain as many shareholders as is allowed by the law” [0] which is just as fictional as it was when he pretended to try to take Telsa private. [0] https://www.bloomberg.com/opinion/articles/2022-04-15/sure-elon-musk-might-buy-twitter https://www.bloomberg.com/opinion/articles/2022-04-15/sure-e...
- dEnigma 5y agoIt's not that radical to equate dollar values with "good for stockholders". At least in my impression that is what most stock holders care about.
- jungturk 5y agoThere's an entire sector of funds that include criteria around environmental, social, and governance impacts in addition to returns on investment. https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins-1 https://www.investor.gov/introduction-investing/general-reso...
- philistine 5y agoThe board has declared the price offered to be too low. You say it's high enough, but I doubt you own as much stock as the people on the board.
- nickysielicki 5y agoTo be clear, they haven’t actually rejected the offer yet, they’ve simply limited the ability of Musk to acquire a majority stake in the case that they reject.
- jayd16 5y agoIf you think the stock could grow further without Musk then the board would be protecting your interests.
- ryoshu 5y agoIf North Korea offered $60 billion to buy Twitter would Twitter be forced to sell? Not comparing Musk to NK, but money isn't the only consideration when an offer to sell comes in.
- loceng 5y agoIndeed, what happens when Elon starts his own platform instead and uses some of the ~$40 billion he'd otherwise buy Twitter with instead on paying top users of Twitter to exclusively use his platform instead?
- metadat 5y agoI'd ditch twtr in a heartbeat, at this point it's a cesspool in every sense.
- dev_tty01 5y agoThere are already alternatives to Twitter. Why haven't you ditched it already?
- metadat 5y agoI'm aware, and do you realize nobody of note is using the alternatives? Why would you recommend someone invest time building a presence in yet another loser platform with bleak future prospects? Doesn't seem helpful or all that bright. For a real alternative to succeed, solid backers focused on dethroning tw are needed to inspire confidence and stability, then we all need to jump at about the same time to get the momentum going and bounce out of the twatterverse. As it stands now, there is no real competition.
- tsimionescu 5y ago> I'm aware, and do you realize nobody of note is using the alternatives? That's exactly the point - there is no reason to believe this would change if Musk created his own social network.
- deleted 5y ago[deleted]
- paxys 5y agoNot everyone buys a stock for a quick short-term turnaround. If I expect Twitter to 20x in the next 5 years why would I want to sell my share to Elon? And existing investors all have the option to cash out today for just 17% less than Musk's final offer.
- aetherson 5y agoIf you expect Twitter to 20x in the next 5 years, then a: You're dreaming. b: You're absolutely expecting a quick short-term gain.
- JumpCrisscross 5y ago> b: You're absolutely expecting a quick short-term gain To put this in perspective, 20x in 5 years is an 82% CAGR. And five years is far short of the length of an economic cycle. Traditionally, "long term investing" meant across at least one whole business cycle.
- EdiX 5y agoTwitter has operated for 16 years and public for about 10, explosive growth of their userbase is in their past and monetization strategies have already been implemented for years. There is no reason to believe it has the potential for such growth.
- paxys 5y agoThen why were they holding the stock the day before Musk got involved?
- mechanical_bear 5y agoThey feel there is potential for growth, just not flights of fancy like you describe.
- IMTDb 5y ago> If I expect Twitter to 20x in the next 5 years why would I want to sell my share to Elon? Vote with your dollars: buy shares at a price higher than Elon's. Borrow if you must. If you are not ready to take that risk, then maybe your expectations are more wishful thinking than anything real.
- dev_tty01 5y agoToday's price and the 'expected' future price is all that matters. The 90% lifetime price history is not relevant. All transactions of this nature are based on future value. The offer is only an 18% premium at a time when many tech stocks are being hammered due to extrinsic reasons. It is not a serious offer.
- drstewart 5y agoI take it you're highly invested in Twitter stock given how confident you are it's going to go up by more than 20%?
- aleister_777 5y agoIt closed $.18 above initial offer price in 2013.
- quickthrowman 5y agoThe share price tells you nothing by itself—you also need to know the amount of shares outstanding at both points in time to make an actual comparison.
- _v7gu 5y agoToday's price is the expected future price. If you disagree, go buy the stock and make some money.
- tsimionescu 5y agoThat is irrelevant. To show a breach of fiduciary duty with this kind of argument, you would basically have to prove that it is objectively impossible for Twitter stock to be worth more than what Musk offered over some horizon. I very much doubt there has ever been a successful case taking this approach.