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Musk announces funding secured for Twitter buy
- RexM 5y agoDidn't Twitter already turn down his offer to buy them?
- shkkmo 5y agoThey adopted a poison oil that they can use to discourage a hostile takeover while they consider the offer. The poison pill doesn't necessarily mean the offer will be rejected as it can also put them in a better bargaining position to try and negotiate a higher price.
- deleted 5y ago[deleted]
- arangof 5y ago
- spikels 5y agoWill be interesting to see if Musk has found a way around the poison pill. There are several theoretical techniques to avoid triggering them but as far as I know none have been tried in practice. There is also the issue of whether a company would actually follow thru and implement a poison pill as there would be lots of fallout. Anyone have a sense of what might happen?
- rangersanger 5y agoCheck out Matt Levine. He has a great series explaining some potential possibilities. https://www.bloomberg.com/opinion/authors/ARbTQlRLRjE/matthew-s-levine https://www.bloomberg.com/opinion/authors/ARbTQlRLRjE/matthe...
- spikels 5y agoUnfortunately paywalled and not sure which Levine article you mean. Edit: And as best I can tell Levine has been wrong on this situation at every step…
- vageli 5y agoLikely this one: https://www.bloomberg.com/opinion/articles/2022-04-20/elon-checks-his-pockets https://www.bloomberg.com/opinion/articles/2022-04-20/elon-c.... FWIW I believe you can read his content for free if you subscribe to his newsletter (or bloomberg's newsletter?).
- colinmhayes 5y ago> And as best I can tell Levine has been wrong on this situation at every step Perhaps when it comes to the sincerity of Elon's actions, but I'm not aware of when he's been wrong when it comes to Elon's legal options.
- rangersanger 5y agoYeah, OP was asking for legal options and this spells them out. Additionally, Levine has been wrong about which option Elon will pick, but he's also generally been spot on about listing all potential options and also saying "this guy is unpredictable, so who knows."
- slenk 5y agoWhat is the poison pill?
- ceejayoz 5y agoIf someone buys more than 15% of shares, they can issue more shares to other people to dilute them.
- emteycz 5y agoI don't understand how that's not financial fraud.
- runako 5y agoWhat would be fraudulent about that? Companies issue & retire shares all the time, for lots of reasons.
- emteycz 5y agoYeah but they usually don't do it with the express purpose of screwing over an investor - and when they do, there are consequences (like FB).
- runako 5y agoYou're not making a case for this being fraud. Why would this be fraud rather than a sharp-elbow business tactic? "Fraud" has a concrete meaning; for this to be a fraud, one would need to be able to identify precisely of what Musk has been defrauded.
- mypalmike 5y agoThe poison pill clause is part of the shareholder contract, often specified in the articles of incorporation.
- danieldisu 5y agoOh, if they execute the poison pill there will be consequences, just not legal ones. Trust is a big part of stock value, if you don't trust the board is time to sell...
- xadhominemx 5y agoHe hasn’t which is why he’s angling for a tender offer
- spikels 5y agoAre you thinking a tender offer somehow overcomes the poison pill?
- xadhominemx 5y agoYes, if he launches a tender the offer goes to the shareholders. He wouldn’t need to build a larger stake himself.
- kpommerenke 5y agoA tender offer is a means of building a large stake, so the poison pill would still be active. Therefore, he will not launch a tender offer.
- lkfsfldkjfslk 5y agoI hesitate to speculate on what Musk will do specifically, but often in a poison pill situation a tender offer will be contingent on the removal of the poison pill. The point of the tender offer is not to buy the shares immediately, but to incentivize shareholders to put pressure on the board to remove the poison pill, then complete the tender offer it's removed.
- deleted 5y ago[deleted]
- xadhominemx 5y agoIncorrect.
- spikels 5y agoI don’t think this is correct.
- ceejayoz 5y agoThe poison pill can be trivially (for certain definitions of trivial) avoided by having several allies buy 14% of shares each, I presume.
- xadhominemx 5y agoYou presume incorrectly. Any coordination would make Elon and his allies a “group” which would mean they are collectively treated as an individual.
- ceejayoz 5y agoHow do you prove people are in a group of this nature?
- xadhominemx 5y agoYou check to see if they are communicating.
- ceejayoz 5y agoHow do you that without a search warrant?
- rootusrootus 5y agoAsk, I guess. The people doing the communicating are perhaps committing fraud and endangering their own wealth and freedom if they lie. I'm willing to bet the SEC has regulations that apply to this situation already.
- deleted 5y ago[deleted]
- xadhominemx 5y agoIf three large shareholders came in with a similar agenda but did not disclose group status, the SEC would investigate. First, the SEC would request that they turn over communications records. 99.9% of the time, they would. If they didn’t, the SEC would seek a warrant.
- baby-yoda 5y agoI was wondering about this - what's to stop him from creating 3 permanently sealed South Dakota trusts, acquiring 14% in each, and combined with his personal share calling a vote and immediately rejecting the poison pill and firing the board?
- rootusrootus 5y agoIIRC Twitter already has rules about shareholder votes, and it couldn't happen until next year at the earliest. There's no provision for shareholders to call for a vote at any random time.
- deleted 5y ago[deleted]
- tptacek 5y agoThe lawyers thought about that the day poison pills were invented. It's in the very first lines of the shareholder rights agreement.
- boringg 5y agoWait what is a permanently sealed South Dakota trust? And how do I get one of those interesting sounding mechanisms.
- dahfizz 5y agoHas the board formally rejected his offer yet? The poison pill only applies to a hostile takeover - i.e. if Elon just starts buying up all the shares in the market. If the board accepts his offer to buy the company, the poison pill does not take effect.
- once_inc 5y agoI doubt the board is going to agree. Musk might want to buy, but they will actively thwart his efforts, even if that's not in the interest of shareholders.
- cpr 5y agoWhich goes to underline Musk's point that the board doesn't have the interests of shareholders in mind. Clearly, the cabal is not interested in losing control of the public narrative.
- mytailorisrich 5y agoWhich is a breach of their fiduciary duties.
- dev_tty01 5y agoWhich is historically very difficult to prove and enforce.
- likpok 5y agoCourts have traditionally given the board wide leeway to decide what is best. There was the one case (Dodge v. Ford Motor Co) that held otherwise but it's been walked back in recent years.
- justusthane 5y agoAs I understand it, it's not. The whole thing about fiduciary duty is a bit of a meme. The board can argue that they believe that Musk will run Twitter into the ground and in the long term not selling is a better financial move, and due to the Business Judgement Rule, the court is likely to side with them (whether or not they're actually right).
- mytailorisrich 5y agoNot working in the interests of the shareholders is a breach of the board's fiduciary duties (which is simply what I commented based on the parent comment I was replying to). The issue is indeed always to determine whether a course of action is knowingly not in the interests of the shareholders.
- gavinray 5y agoCan someone who understands finance ELI5 the section about the financing: > "To finance the Proposed Transaction or a Potential Offer, entities related to the Reporting Person have received commitment letters committing to provide an aggregate of approximately $46.5 billion as follows:" What follows seems like Elon is "paying" for Twitter with... imaginary money. "A debt commitment letter" "A separate debt commitment letter" "An equity commitment letter" Am I understanding it correctly that effectively $0 is coming out-of-pocket for purchasing Twitter? Why can't anyone do this? I'll promise you a bunch of debt and equity, too.
- martincmartin 5y agoIt's like buying a house with a mortgage. You wouldn't say you're buying a $1MM house for $200k just because you had a 20% down payment.
- HWR_14 5y agoIf you had a signed letter that GS was willing to loan you $43 billion, you'd get taken seriously too. If you want to bid on a house, you'll need a signed letter promising a loan of (house price) on it from a bank to be taken seriously (or cash reserves)
- bombcar 5y agoThe debt is banks agreeing to loan Musk $3 billion because they know he's good for it. The second letter is banks agreeing to margin $12.5 billion against an unspecified amount of Musk's stock, and the last is Musk pledging the rest (or something like this). You can promise all you want, but you have to get the bank to be willing to pony up the money - but what you're describing can and does happen - leveraged buyouts were common in the past. https://en.wikipedia.org/wiki/Leveraged_buyout https://en.wikipedia.org/wiki/Leveraged_buyout You find a company with no debt (say, TLSA) and you believe it is undervalued, so you convince banks to loan you enough money to buy TSLA and pledge TLSA itself as the collateral. If the purchase goes through, you now own TLSA and a TLSA sized debt. If it doesn't, nothing much happens.
- nonameiguess 5y ago
- boomboomsubban 5y agoDoes Twitter even made money? The Wikipedia article claims they went from losing several hundred million in 2017 to making a billion in 2018, but I'm not seeing what change led to that huge turnaround.
- Schopenhauer01 5y agoSelling user data to governments?
- boomboomsubban 5y agoStarting in 2018?
- Flankk 5y agoThey have about $5 billion in annual revenue. Most years they lose money, hence the poor stock performance. Welcome to silicon valley.
- mountainriver 5y agoGood, I hope he buys it and shakes things up. Twitter needs a revamp
- mirceal 5y agowhat does “shake things up” mean? whenever something like this happens you have to ask yourself why now and what’s in it for Musk (let’s be real: nobody spends this much without an agenda). My fear is that Musk’s endgame is to reinstate a specific account that was banned after some specific events around a specific election. If this is what’s happening he can frack off.
- memish 5y agoHe should reinstate all accounts that were banned for political or ideological reasons. Or just straight up do a jubilee of all accounts unless they posted illegal content.
- mirceal 5y agowhy? what’s in it for him and what does it mean for all the other people in the US and in the world? ask yourself: why were those accounts banned?
- zionic 5y ago> why were those accounts banned? Twitter is/was a ban happy shithole. It is absolutely trivial to get banned on Twitter. My favorite example is someone I know getting banned for posting pitbull fatality statistics. They were banned for “racism”. Against dogs. Twitter needs a top to bottom purge.
- mrtranscendence 5y agoI call bullshit. Nobody was banned from Twitter for being racist against dogs. Full stop. Did not happen.
- lesgobrandon 5y ago
- humanistbot 5y agoJust like his "funding secured" to take Tesla private?
- leetcodesucks 5y agoTesla has real physical value not like Twitter
- edgyquant 5y agoThis is a non-sequitor
- fxtentacle 5y agoNo, this time he has actual written warranties from banks.
- colechristensen 5y agoNo, this is an SEC filing not a tweet.
- deleted 5y ago[deleted]
- dev_tty01 5y agoWell, the jury is still out on that. Musk claims funding was secured and he was forced to settle with the SEC. https://www.youtube.com/watch?v=vzY_jIJaZwk https://www.youtube.com/watch?v=vzY_jIJaZwk Hard to really know the facts, but things may not be as they appear. In this case however, he has filed the SEC docs to verify that funding is secured.
- seoaeu 5y agoThe people Musk said he had funding secured from for taking Tesla private immediately denied it. To the point of saying they’d only had a single conversation with him, and never discussed price
- Schopenhauer01 5y agoHopefully he buys it.
- sudden_dystopia 5y agoI love that this document is dated 4/20, just a coincidence I’m sure!
- andrew_ 5y agoIIRC that's the date his offer to the board expired. And yes also because 420.
- shmatt 5y agoI feel bad for Twitter employees or potential employees right now. You KNOW Musk has no intention on converting unvested RSUs to cash. He'll either get rid of them completely while giving everyone a 10% raise (common Twitter TC is 50% cash 50% RSU) or keep everyones cash the same, and tell them their RSUs are now amazing options that will be worth soooo much when Twitter gets relisted in the future
- runako 5y agoLikely also will make deep staff cuts, especially to areas related to content moderation, display algorithms, etc. If this succeeds, I would not be surprised to see a 50% headcount reduction as one of the earliest actions.
- notyourwork 5y ago> He'll either get rid of them completely while giving everyone a 10% raise (common Twitter TC is 50% cash 50% RSU) Is that possible? I guess it is but wow, I would be beyond livid if my compensation changed due to this.
- hunterb123 5y agoForemost, I don't feel bad for anyone that works at Twitter. But the scenario that you KNOW is going to happen doesn't seem likely.
- lucasmullens 5y agoIf employee compensation is 50% RSUs (which have a public value and can be sold immediately once vested, basically making them as good as salary) then what you're saying is Elon might give everyone a 50% pay-cut. I guess I can only speak for myself at Google which has a similar high percentage of pay as RSUs, but if they suddenly took away everyone's stock grants, nearly everyone would quit.
- jontas 5y agoPrivate companies can still issue RSUs and have internal liquidity events for shareholders.
- woodruffw 5y agoEntirely separate from the politics around why Musk would want to buy Twitter: I don't understand the world in which this would be a confidence-inspiring maneuver amongst Tesla's shareholders. If my reading is correct, a significant portion of Musk's net worth (in the form of Tesla equity) will now be held up in a perpetual money-bleeding venture.
- bombcar 5y agoThe TLSA shareholders will be more concerned with TWTR bleeding Musk's attention vs bleeding his shares; he's not giving up the shares or control of TSLA. It's also very likely that if Musk takes TWTR private he then privately sells portions of it to people who would like to be in on it with him. SpaceX is private, for example. The key is that TSLA is not buying TWTR (which stranger things have happened), it's Musk.
- woodruffw 5y ago> he's not giving up the shares or control of TSLA. Again, correct me if I'm wrong, but it sounds like he's financing this prospective purchase of Twitter with loans that are backed in no small part by his stored equity in Tesla. He might not be "giving up" shares, but he's effectively introduced an interested party with the ability to seize those shares to recover any losses. That's the part that would concern me as a Tesla shareholder.
- numair 5y agoIn case anyone is wondering where Morgan Stanley is going to get the money for this debt deal, it will look a lot like this: https://twitter.com/pacday/status/985314558775410688/photo/1 https://twitter.com/pacday/status/985314558775410688/photo/1 I’m joking, but I’m kind of not… We will see who is actually behind the package, but MUFG and friends have a habit of financing foreigners’ adventures while keeping Japanese companies under-capitalized and starving. (For those not aware, MUFG owns a large part of Morgan Stanley, hence the photo above.)
- rpmisms 5y agoQuite interesting how this is basically a slightly larger personal loan that anyone might take out to make a purchase.
- tasty_freeze 5y agoI've never had a twitter account and didn't plan on getting one. But if Musk is successful taking over twitter, my intent is to get a twitter account and start posting the most grotesque and offensive things to see if Musk really is a free speech absolutist. My suspicion is that he is mostly interested in his free speech, not mine.
- belter 5y agoHere is something grotesque you can post: "Elon Musk says Tesla hopes to produce a robotaxi with no steering wheel or pedals in 2024" https://www.businessinsider.com/elon-musk-tesla-build-robotaxi-without-wheel-pedals-in-2024-2022-4?international=true&r=US&IR=T https://www.businessinsider.com/elon-musk-tesla-build-robota...
- macspoofing 5y agoMusk makes a lot of (insane) promises - like going to Mars in the next 5 years. Sure.
- badwolf 5y agoor selling "Full self driving" packages in Teslas
- deleted 5y ago[deleted]
- ohmanjjj 5y agoWe are too.
- macspoofing 5y agoHe is concerned with the Overton window being too tight.
- openforce 5y agoLol, I don't think that is necessary. He has already bought his free speech with the ~9% stake.
- wolfofcrypto 5y agoI would feel slightly bewildered as a Tesla stock holder — Imagine Tim Cook would do the same with his Apple stock to pull off a takeover.
- deleted 5y ago[deleted]
- JaimeThompson 5y agoSeems it would be better for Musk's stated goals to use this money to expand clean energy, SpaceX, and such things instead of buying a social media application.
- ultra_nick 5y agoMaybe he's run out of ideas to build there.
- chasd00 5y agoTwitter is like a cancer, it really gets to some people and overtakes them. I wish Musk would just logout and focus on Starship.
- photochemsyn 5y agoWhy do you think Besos bought the Washington Post for what, $200 million... right after AWS got that $600 million CIA web services contract? Notably there are no more "Top Secret America" investigations looking into how the US government feeds money to defense contractors at the WaPo. https://en.wikipedia.org/wiki/Top_Secret_America https://en.wikipedia.org/wiki/Top_Secret_America Is Musk following in Besos steps, or will he really open source the ranking algoritm and increase the character count of posts to paragraph-scale (512-1024 characters)? Time will tell I suppose.
- JaimeThompson 5y agoThis is also something strange, Musk talks about opening the algorithm but hasn't, as far as I can tell, talked about opening the datasets, models, etc that the algorithm depends on which makes it a bit less useful then it could be. He knows this from his work with Tesla so the lack of clarity is strange to me.
- colinmhayes 5y ago> Why do you think Besos bought the Washington Post Because it was cheap and he wants to support journalism. Seems a lot more likely than your conspiracy theory.
- yalogin 5y agoAt the least he is not partnering with any fringe elements, but he is very serious about it. This also means if the board says we will sell it to you for $90 bucks he may back off, as coming up with another 40 billion might be very tough even if it’s leveraged.
- peanut_worm 5y agoSeems like such a big gamble for what basically amounts to a logo. He could very well just make his own website.
- mpalmer 5y agoIt would be difficult competing for Twitter's 200 million users if he built a competitor. Much easier to spend the money buying the users themselves.
- darknavi 5y agoHe's not buying the brand, he's buying the giant userbase.
- yur3i__ 5y ago>what basically amounts to a logo, he could very well just make his own website Trumps fall in mainstream impact has proved this to not be the case. It used to be we would hear something crazy from him on a daily basis. If the ex president can't make his own website and maintain relevancy, I doubt musk can either
- netule 5y agoHe's buying the brand and the user base, not the website.
- xnx 5y agoWhat happens to https://twitter.com/elonjet https://twitter.com/elonjet if Elon Musk controls Twitter?
- mcintyre1994 5y agoA fun test of Musk's commitment to free speech I guess!
- ryzvonusef 5y agoHe launches a website?
- purephase 5y agoI can't believe this asshole is spending billions so that Trump can get his Twitter account back.
- thoughtstheseus 5y agoIt’s a another step toward Human + AI agents. Musk will give users the ability to choose, modify, and control their own algorithms.
- rootusrootus 5y ago> Musk will give users the ability to choose, modify, and control their own algorithms. Like he does his existing customers or employees? I can never understand how some people still have such unbridled optimism about what Elon Musk will do next, given how ample the evidence is that he won't. He has quite a track record to base predictions on.
- helsinkiandrew 5y agoSo its $25.5 billion of debt backed by his Tesla shares and $21 billion from himself, presumably from selling Tesla shares? I wonder how many will accept the offer - about 30% of ownership have said they're not interested at that price, if he let a few large holders stay on it could be successful - but this would be a kick in the teeth for smaller investors and his retail fans.
- topspin 5y ago> about 30% of ownership have said they're not interested at that price Why would Musk need more than 51% of voting shares for control of the board?
- helsinkiandrew 5y agoHe wouldn't. Are you saying that 30% of shareholders saying they wouldn't vote for the take over implies that 70% are for it?
- blippage 5y agoPersonally, I think Musk is having a bit of a laugh. This will never happen. * Twitter operating income for 12 m/e 31 Dec 2021 was negative. For the q/e 31 Dec 2021 it was $0.167B. Why he thinks Twitter is worth $45b is beyond me. What would Warren Buffett do? Well, he wouldn't buy Twitter, that's for sure. * Time will tell, of course. I've been wrong before. But the whole thing seems like madness to me.
- hunterb123 5y agoHe's said time and time again it's not about the economics. It's hard to put a price on the propaganda machine and it's network effect. It's not really about making money with Twitter. - edit - @McLaren_Ferrari: I disagree it's a misguided purchase, it makes sense to me from his stated goals. But maybe you can sell the world's richest man your financial consultant nightclub analogy and save everyone.
- golemotron 5y agoI think it's very interesting that the subtext is that no one believes he will run Twitter at a loss; it's not his nature. If making Twitter better while making money is possible, Elon's the one who could do it.
- jollybean 5y agoHe can make Twitter worth more, while using it as his personal soapbox. It's actually rational.
- McLaren_Ferrari 5y agoThen it's once again a misguided purchase. Trump didn't own any media back in 2015-2016. He won because he sucked the air out of the room by making hyperbolic statements and riffing off the huge news cycle generated by his hyperbolic statements. A good and effective PR team and a charismatic deliver is all you need and it comes for much less than 40B. This is what kids learn in nightclubs fairly early: if you want to command the club you want to be a DJ. Owning the club will leave you with both a huge hole in your pocket and in the shadow of the DJ every given Friday. The answer to Musk "problems" is to become a good public speaker and work on his in person social game, not monopolizing an online platform on which he has by far the biggest account already. Pushing on a string that's what it is. That's about the only thing he can do to expand his virality, owning the platform is kinda redundant. Real life still happens offline (thankfully)
- throwaway2037 5y agoI noticed on the form: Citizenship or Place of Organization: USA I know that he was born in South Africa to a South African father and a Canadian mother. I assume this means he is entitled to citizenship (and passports) in both places. Does anyone know if he still has both of these citizenships? If yes, I am surprised that he is not required to declare them on this form. Maybe SEC does not care about other passports, if already a US citizen. One idea: Maybe he renounced the others so that he can run a rocket company in the US. As I understand, Space X is crazy strict about security requirements, and many of those are dictated by the US Federal gov't. For example, in New York City, I knew many Jewish people that were native born US citizens, but also had an Israeli passport. It made it easier to visit Israel (much lower security requirements), and it was an important cultural link for them.
- mpalczewski 5y agoWhen you become a US citizen they ask you to renounce other citizenships. At least it was the case the for me.
- throwaway2037 5y agoWhat were your other citizenships?
- reaperducer 5y agoI suspect it depends on what your original citizenship was. There are a number of countries with which you can have dual U.S. citizenship.
- nickmain 5y agoThe Naturalization Oath is "Renounce and abjure absolutely and entirely all allegiance and fidelity to any foreign prince, potentate, state, or sovereignty of whom or which the applicant was before a subject or citizen". Makes no mention of giving up citizenship or passport-holding, just allegiance.
- goatcode 5y ago
- Simplicitas 5y agohttps://twitter.com/2obvious2/status/1516848142775463940?s=20&t=lKC-uhczI1ujJR-k-1usXg https://twitter.com/2obvious2/status/1516848142775463940?s=2...
- zionic 5y agoElon nailed it here
- mrkramer 5y agoDrama Queen! Imagine Jobs or Page behaving like this.
- wly_cdgr 5y agoI think it's a good idea and I hope he suceeds
- civilized 5y ago> the Common Stock, par value $0.000005 per share (the “Common Stock”), of Twitter, Inc. Does anyone know what the hell this means? Is this one of those annoying things in the finance world where, back in 1930, this would have been a meaningful number, but nearly a century later, everything is structured completely differently, there's a completely different set of numbers that are meaningful, but we have to keep dragging this legacy set of meaningless numbers around for legal reasons?
- overthemoon 5y agoI have no illusions about how well-managed Twitter has been up to this point, but it is bitterly ironic that the narrow, libertarian-adjacent argument that goes something like "they're a private enterprise, they can ban whoever they want, free speech has nothing to do with it" is being tested. What happens when a giant, unaccountable communication monolith is run by a guy you don't like? I can't stand the man, and I dislike the idea of him owning Twitter. Who knows what's going to happen, whether he'll succeed or not, Maybe he'll put his money where his mouth is re censorship, I don't know, but that there will be an ideological changing of the guard is inevitable, imo. What then? Do we really want these platforms to have so much unaccountable control over the discourse?
- dangerface 5y agoFreespeech is an inherently libertarian believe I don't think it's the libertarians that are trying to ban people for not being politically correct.
- zionic 5y ago> Do we really want these platforms to have so much unaccountable control over the discourse? Funny how this is suddenly a problem when Elon tries to buy. I agree in principle, but the bias on display is overwhelming.
- overthemoon 5y agoThat's exactly my point. I don't think the people who wanted this or that account banned really thought through what they were saying when they were appealing to the private nature of Twitter's ownership.
- hristov 5y agoActually, if you know what you are talking about, this filing actually shows Elon is about 21 billion dollars short. This is because 21 billion dollars of the commitment is coming from him and not from any financial institution. He is a very rich man but almost his entire wealth is tied up in tesla shares which he cannot sell in such large amounts and ownership of spacex which is even harder to sell. If he tries to sell 21 billion dollars worth of tesla shares, the share price will collapse. So no, once again he does not have funding secured. And once again he is trying to bullshit his way around the issue, although this time the bullshitting is a little more sophisticated. It is still possible that he tries to sell a lot of tesla shares to get the cash to buy twitter, but it is unlikely.
- bcrl 5y agoOr he'll trade TSLA shares for TWTR. I can imagine that some investors in TWTR would be happy to take him up on such an offer.
- weeblewobble 5y agoIf TWTR holders want to trade for TSLA they can simply do it on the open market
- motoxpro 5y agoWhen you see "Acquired for 50% cash and 50% stock" this is a company "trading" x shares for y shares. So yeah this happens all the time not in the open market.
- jay00 5y agoNot for the premium he's offering to take it private.
- HWR_14 5y agoThis is true. But if he was talking about trading shares of SpaceX for TWTR I would probably rearrange my holdings.
- 5y ago
- cwp 5y agoI'm kinda curious about what would happen if Musk triggered the poison pill. Yeah, his existing stock would be diluted. But... how much? What would it do to the share price? The poison pill is essentially a gun to the head of all the other shareholders: you're either with us or against us. Help us fight this hostile takeover or get diluted along with Musk. How will people react to that? Some will jump at the chance to buy discounted shares. Others will be unable or unwilling to buy more, and sell to avoid dilution. But they'll have to sell to people who aren't currently shareholders, because shareholders have a better option. That'll drive the price down, and also reduce the discounted price for shareholders. Will investors that buy in after the poison pill is triggered also get the discounted price? Will existing shareholders wait to buy discounted shares until after the exodus lowers their price? There are so many feedback loops and non-obvious motivations here. It's possible that Musk could trigger the pill, stand back and watch the stock crater, then buy it cheap. And if the stock does crater, will he then have to compete with other takeover bids?
- tptacek 5y agoHis stake will be cut approximately in half. We probably don't have to wonder what happens if the rights agreement is triggered; it won't be (it would be the first time in business history one ever had). Doing so would mostly just be a way of setting billions of dollars literally on fire, out of pique.
- cwp 5y agoYeah, it probably won't be triggered; even Musk would wince at that kind of loss. But that's exactly why we have to wonder, or I do at any rate. The poison pill seems suspiciously like a free lunch for the board if you only look at the 1st-order effect: Musk is diluted, and loses billions. That right there is enough to stop a rational investor. But it's partially a bluff. The board doesn't hold much stock (except Jack) and the assumption that all the other shareholders will pony up cash to double their exposure is probably wrong. Many will, perhaps most will. But the share price will take a hit, and Musk is free to acquire as much stock as he wants. Maybe he can't get every last share, but he might be able to take control. Again, I agree with you that it's unlikely to happen, but if there were ever a time to question the conventional wisdom, this is it.
- fundad 5y agoNo reason not to believe he'll be the new co-founder of Twitter. Sterling track-record.
- boringg 5y agoTo invest or not to invest? Sterling track record indeed.
- throwawayacc2 5y agoIs this scenario something that can happen, or am I missing something? An agent of Elons buys 15% of the stock triggering the poison pill. The agent declares publicly he is not an agent, has no intention of selling the stock to Elon, has no business with him, etc - Essentially avoiding being lumped with Elon in the same group. Does Elon now get to buy 85% of Twitter at a discount?
- tablespoon 5y ago> Is this scenario something that can happen, or am I missing something? > An agent of Elons buys 15% of the stock triggering the poison pill.... The agent declares publicly he is not an agent... I'm guessing that would be some kind of fraud or at least a securities law violation.
- throwawayacc2 5y agoIf the agent doesn’t sell that stock, can it be proven that he is actually an agent?
- robonerd 5y agoIn principle, sure. Why not? Sue him, subpoena the emails/etc and see if you can find some incriminating statements. There is no guarantee of success, but it could work.
- kjksf 5y agoPoison pill is a scheme enacted by Twitter, not SEC or any government agency. It's not law therefore finding creative ways to go around that poison pill would not violate any laws.
- spoonjim 5y agoRight, but the method of averting the poison pill described above would likely violate securities laws around coordinated behavior between market participants.
- deleted 5y ago[deleted]
- legitster 5y agoI hope everyone has been following along with Matt Levine's excellent newsletter: https://www.bloomberg.com/opinion/articles/2022-04-20/elon-checks-his-pockets https://www.bloomberg.com/opinion/articles/2022-04-20/elon-c... > This leaves Musk two main options. One is to negotiate with Twitter’s board and try to strike a friendly deal. This might be hard because the board probably wants more money than Musk is willing to pay, and also because there seem to be strategic and personal disagreements between Musk and the board that might make friendly negotiations difficult. “I am not playing the back-and-forth game,” Musk said in his initial proposal; “I have moved straight to the end.” That’s an annoying way to start negotiations. > His other option is to pressure the board into dropping the pill, and the classic way to do that is with a tender offer plus a proxy fight >I guess Musk has a third option, which is to do nothing and tweet mean things about Twitter’s board. Honestly a totally respectable option; $40 billion is a lot of money, owning Twitter seems exhausting, and Musk does have several other full-time jobs. A fourth option would be “buy a lot of stock, trigger the poison pill, and unleash absolute mayhem,” which is not totally impossible given that it is Elon Musk.
- FerociousTimes 5y agoThe Shitbidder in Chief strikes again! When will people get tired of his stale shitposts and shenanigans?! Get a hobby, Elon and seriously consider cutting on Twitter usage, it's frying your brain.
- known 5y ago[dead]
- root_axis 5y agoI don't believe Musk's free speech claims for a second, he has a long history of regailing the public with grandiose claims and then failing to deliver. I'd bet 100 to 1 that twitter will continue to ban accounts for legal posts.
- kyle_martin1 5y ago
- ComradePhil 5y agoI think Musk is seriously misled about the future of social media. Twitter is where people go for posting stuff when sitting on a toilet. Even though it may seem like it is where all the newsmakers are at this point in history, imho it doesn't have much of a future. Everyone else is better off posting Tiktok videos to communicate. Tiktok (or something similar) is the future of social media where you can see not only what people are literally saying but also how they are saying it... tone of voice, facial expressions (if you wish to reveal it). Video conveys a lot more information in a short time than a block of text ever can... because a block of text has to be given emotional charge, even a hint of intent by the reader... which makes it open to interpretation in many many ways, most of which can be very misleading. Younger generation is not going back to text based social media.
- bandyaboot 5y agoWhy so much interest in this? Isn’t it pretty clear at this point that the Twitter board isn’t interested in selling to him at $54.20?
- xg15 5y agoFrom my understanding, the board has no (direct) say in this. He's asking the shareholders - i.e. anyone who owns Twitter stock - to sell to him for that price until he has the required majority. All the board can do is put up measures to make this hard (like the poison pill thing).
- nyxtom 5y agoThat is a serious amount of debt financing and going into margin. This is significant risk for an asset that is unlikely to get significantly better in value. I wonder how much a collapse in Tesla stock would trigger a margin call.
- m1117 5y agoSuch a bald move
- Barrera 5y agoWait, I thought he made his final offer. It was rejected. Therefore, no deal. How is this still relevant?
- fleddr 5y agoI see a lot of bad faith assumptions made about Musk's supposed plans with Twitter in the case he should control it. Although I'm not suggesting to trust a character like Musk purely on his words, it's at least interesting to be informed of plans he openly expressed. First, he clearly expressed there's no economic motive. Which makes sense as Twitter is a terrible investment. A pessimistic interpretation is that it's about prestige, a positive one is that he genuinely wants to improve Twitter, whatever that means. Personally, I think it's a little of both, they are not mutually exclusive. Regarding free speech, he stated that the first goal was to understand current "censorship" mechanisms and policy, and to make them more transparent. It's hard to disagree with this one no matter your leaning. Further, he intends to be fully compliant with free speech laws, in every relevant country. There isn't much choice in this matter, but still. As for what any new policy would look like, he stated that in the case of a grey zone, not censoring it is preferential. The grey zone is not defined, but in any case it means less censorship. As for any political direction, he stated to have none. His ideal would be for both extreme ends to be equally angry, so in balance. This suggests that it's not some play to revenge-censor the far left or steer things in any explicit political direction. Other than this, he has plans to improve/cleanup the broken parts of Twitter, like bots. Like I said, you can take all of these public statements with a grain of salt, and you should. I personally give them the benefit of the doubt, as pretty much all of the "worst case" interpretations make no sense. It's not an economic play. It's not a play to only allow speech that benefits him directly as what possible Twitter speech would benefit him directly, given the position he's already in? He's also not turning it into a 40 billion dollar 4chan, there's just no rational basis for such pessimistic takes. Perhaps a simpler take is that Twitter is so broken, dysfunctional and toxic that he can't possible make it much worse. And if he still does, let's hope it fully sinks. The world would be improved.
- threeseed 5y agoa) Twitter is not a terrible investment. Their fundamentals are strong i.e. growing revenue/profit and any competition has failed to materialise. And we have yet to see the financial impact of their premium offerings e.g. Twitter Blue. b) We can be pessimistic about Musk's intention because of his past behaviour. At Tesla/SpaceX he has routinely suppressed any free speech and unionism. With Jack Sweeney he tried to buy his silence and he has on a number of occasions filed defamation lawsuits over things people have said. He is not altruistic but instead uses his power to shift the world to his benefit.
- m34 5y agoWondering if there are certain individuals/institutions/organizations that would have vested interests in any of this? Looking at the amount of money that is spent on nation-level campaigning (for a term length of ~4 years) the sum short would be minuscule when compared to near-global reach to be gained, so maybe the total of folks chipping in one way or another weights in much more p.a. than what currently is "on the table".
- sebastos 5y agoI am enjoying the cognitive dissonance of Musk skeptics who hate his huge wealth and influence, yet loudly insist it would be a practical impossibility for him to spend 10% of his net worth. Which is it? Does he wield more power than any one citizen should have, or is it all just monopoly money that is hopelessly illiquid? The answer will be whichever one makes you wrong and Elon Musk bad. The question of whose voices should be allowed on Twitter seems to me to be missing the civilizational problem. It's akin to asking whether only people who graduated from an accredited conservatory of music should be allowed to play in the kazoo section. The answer might seem complicated until you realize that there shouldn't be a kazoo section in the first place. They sound like 8th graders, and adding some terrible musicians isn't moving the dial on that. Find a new instrument. I know that Musk actually likes Twitter so this would never happen, but wouldn't it be amazing if he bought the company, laid off all the staff with severance packages, and shut the lights off? Then we could let the healing begin...