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I’d assume it would allow Musk to restructure Twitter along longer-term goals. My sense is that he will eventually take it public again, but it’s a hard road to
by vrc 4y ago
I’d assume it would allow Musk to restructure Twitter along longer-term goals. My sense is that he will eventually take it public again, but it’s a hard road to make huge changes to a company’s trajectory when your “fiduciary duty” relies on quarterly earnings reports. For example, killing bots will decimate DAU and would tank the stock. But do that and wait a year or two and perhaps Twitter flourishes as a true p2p platform again. Then you can take it public again with a different narrative and trajectory that’s more in your control. If you were public all along you’d get pummeled for the choice because it crushed the DAU KPI.
- newswasboring 4y agoIs "fiduciary duty" defined by the company in it's by laws or is there a law outlining it?
- ergocoder 4y agoFiduciary duty doesn't seem to mean much. People kept saying that, if board didn't accept, then they would violate fiduciary duty. Then, board accepted the first offer without further negotiation. Who does that in a large deal like this? At least, they should have got a few billions more.
- newswasboring 4y agoNo I meant it in a broader sense. Whenever I ask someone why companies are so hyperfocused on growth every single quarter they usually cite fiduciary duty or something. I am not sure if it's a law or a company by law
- vrc 4y agoCompanies are hyper focused on growth because growth is priced in to their valuation, either by VCs or the public market. Nobody wants to plunk their money into something that won’t give them a return, and non-growth businesses have to pay investors in things like dividends or royalties to keep their market value. In terms of fiduciary responsibility, here’s something I found: https://www.upcounsel.com/board-of-directors-fiduciary-duty https://www.upcounsel.com/board-of-directors-fiduciary-duty I believe you can be sued for breach of this, and can certainly lose your board seat. I would guess it will devalue the company if a breach were to occur.
- ergocoder 4y agoIt is probably a guideline where they have to keep delivering more values to the shareholders. I think it is just a vague guideline because in this instance the board didn't even try to negotiate for a few billions more.