Posted on 04/15/2022 8:23:35 AM PDT by Red Badger
Twitter’s board is reportedly considering using a poison pill in an attempt to stop Elon Musk’s ability to purchase the whole company.
A poison pill is a shareholder rights plan that would limit a single shareholder from purchasing too many shares and forcing the company into a sale, according to The New York Times.
Elon Musk said he had the means to buy Twitter, but investors were skeptical. The board was considering a “poison pill,” a defensive move.https://t.co/pMz9prWHH4
— The New York Times (@nytimes) April 14, 2022
The poison pill would allow Twitter’s board to either flood the market with shares or allow current shareholders to buy more shares at a discount, reported The New York Times. Musk can counter using a tender offer to put his offer to the shareholders instead of Twitter’s board.
“If the current Twitter board takes actions contrary to shareholder interests, they would be breaching their fiduciary duty,” Musk tweeted Thursday. “The liability they would thereby assume would be titanic in scale.”
Prince Al Waleed bin Talal from Saudi Arabia balked at Musk’s offer in a tweet Thursday. He considers himself to be “one of the largest & long-term shareholders of Twitter.”
“I don’t believe that the offer by [Musk] ($54.20) comes close to the intrinsic value of [Twitter] given its growth prospects,” the tweet reads. (RELATED: Elon Musk Jabs Back With Two Questions After Saudi Prince Rejects Twitter Offer)
Musk shot back at bin Talal Thursday.
“What are the Kingdom’s views on journalistic freedom of speech?” Musk replied to bin Talal’s tweet.
Musk offered $43.4 billion Thursday to take Twitter private and buy out all shareholders at $54.20 per share. Twitter’s shares closed the day Thursday at $45.08 per share.
And stockholders should sue!
The ‘woke’ REALLY love controlling the information. Google, Twitter, Facebook. All taken over by horrible people and college indoctrinated tyrants..
IMHO, the intrinsic value of Twitter is zero.
It was a first mover and has a huge base, for now - but there is absolutely nothing special about what if offers. Others are doing the same. It will very soon become “unfashionable”
Indeed they should!
Get the popcorn ready!
Fixed it.
Musk might be better off keeping it as is and getting control over Trumps failed attempt at social media.
And then make it work.
[[“I don’t believe that the offer by [Musk] ($54.20) comes close to the intrinsic value of [Twitter] given its growth prospects,”]]
Haven’t they been losing money the last 3 years?
A poison pill is among the dumbest and least effective approaches, short and long term.
Musk is a genius and a friend of freedom.
The obvious Twitter move is to have an investor coalition led by Jack Dorsey (and a big chunk of his $15B net worth) outbid Musk by $0.10 per share. Musk has committed not to go higher (a mistake unless he is welcoming such an offer).
If not Dorsey, then Bloomberg, Bill Gates, MacKenzie Scott, Steve Schwarzman, Dan Gilbert, Eric Schmidt, Steve Jobs’ widow.
It’s implausible to me that Apple or any other large corporation would be competitive in any kind of bidding contest, or that they would pass antitrust scrutiny.
It does not seem to me that Musk is intent on winning this. As I’ve written, his “BAFO” language invites competing bids. I’m also of the opinion that there are likely better ways for Musk to advance this crucially important cause than to own and control Twitter. I imagine him forcing Twitter to commit to better behavior, then selling into the winning bid, taking his $1.5B in winnings and putting them to some other use, such as starting up his own platform.
However this turns out, Musk I think wins and freedom of speech ends up substantially better off.
I'm no broker or a trader but...the above sounds like something that would get the SEC's serious attention if it were pulled by...oh...let's say...a Donald Trump.
It might be legal but doesn't seem fully above board.
Stockholder lawsuit was my first reaction, too.
They could ‘buy him out’ by counter offering him a substantial profit, he walks away wealthier and they are left with 10% more stock in a dying company................
Twitter is a smaller version of Amazon and Facebook. They were transformational companies that changed the world in their own way, and the two larger ones have enormous market caps for some reason I’ll never understand ... but to the best of my knowledge none of them has ever paid a dividend and I’m not convinced their finances are anything more than smoke and mirrors.
The best outcome here would be that Twatter double down on stupid, Musk sells his holdings for a profit, and then Twatter dies a slow, equity-sucking death.
I think the best scenario would be for these demonrats to outbid the hell out of him substantially raising the stock price, then Elon sells it all at a profit while simultaneously crashing the stock price causing the outbidders to lose substantial money.
Reminded me of a scheme my friend used to do in college where he would donate one cent to the DNC which would cause the DNC to spend money and resources on mailings to thank him for his donation and ask for more donations
Before Musk’s offer, Goldman Sachs had a $30 price target on Twitter stock.
Easy to overcome. Musk tells everyone who believes like him to buy a few shares of twitter. Then let him vote by proxy.
There is a Gamestop solution coming.
The damage is done. No matter what the Board does now, the shareholder suits will run amok. Lawyers are smiling right now at the limitless prospects. The mere act of bidding likely destroyed Twitter.
“..However this turns out, Musk I think wins and freedom of speech ends up substantially better off....”
Musk may have never really intended to buy em...unless he had to, but rather to “flush em out” which he has done regardless of how it goes down...buying em or not.
He definitely stirred the hornet’s nest and put fear into em... For that alone, I’ll give him an A+.
Those poison pills are usually just poison to the current stockholders who might just sue to stop the dilutions.
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