4 ms·

it's radical to equate dollar values with objective goodness

iancmceachern 4y ago
Exactly. Profit does not always equal good. One of my favorite books: "Small giants, companies that choose to be great instead of big"
tsimionescu 4y ago
Fiduciary 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 4y ago
  True, 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 4y ago
    That'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 4y ago
      He 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 4y ago
It'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 4y ago
  There'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...

Exactly. Profit does not always equal good. One of my favorite books: "Small giants, companies that choose to be great instead of big"

tsimionescu 4y ago

Fiduciary 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 4y ago
True, 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 4y ago
  That'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 4y ago
    He 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 4y ago

It'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 4y ago
There'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...