All: speech here isn't very free when the server can't stay up, and it's smoking right now, for obvious reasons.
I'm going to prune some of the top-heavy subthreads and possibly restrict the page size a bit. There are over 2500 comments in this thread, and if you want to read them all you're going to have to click "More" at the bottom of each page, or go like this:
...and so on. Sorry everyone! (Yes, fixes are coming, yes it's all very slow.)
Edit: also, if some of you would log out for the day, that would ease the load considerably. (I hate to ask that, but it's true. Make sure you haven't lost your password!)
So Twitter was at $70 per share a year ago. So what? Jack Dorsey was CEO a year ago, too. The share price was $33 less than a month ago.
But, despite an absolutely incredible roller-coaster news cycle, things have been definitely trending down at Twitter ($33/share last month), which was reflected in its share price. The current executive team (and Dorsey) had wasted time focusing on things that didn't matter instead of things that did matter.
Boards have several fiduciary duties to the shareholders. As an all-cash offer, this generates for the shareholders a substantial return with NO RISK, and so the board has a serious legal obligation to carefully review this offer and make a decision.
If the board elects to reject this offer, then their reasons for doing so need to be very clearly elucidated, because, as Twitter is a public company, they would have to see something in their crystal ball that the rest of the market does not.
Everyone currently holding $TWTR believes that the true value is greater than the current price.
To make a successful hostile bid, you need to pay not just "more than the current price", but "more than the holders of 50% of current shares believe the company to be worth". Usually bidders use analyst price targets to guess at the distribution of holders' internal price targets.
This is what makes it so difficult, and why this bid is very likely to be rejected.
(This is easier to explain with a white board, tbh.)
I don't get how the logistics work in a move like this. If you're a shareholder and the board approves the sale are you forced to sell your shares to Elon at the stated price? What if you don't want to sell?
Edit: I also wonder how leveraged positions, especially shorts, get resolved.
One risk may be that a lot of the blue hairs among the staff may choose to leave the company. Then again, that might be a positive thing for the company’s economic performance.
There is a very clear risk of transformating the social media titan that is Twitter into Truth Social, a sideshow of a forum that is dedicated to the worship of one man. That would plummet the stock price.
And to note, Musk is going against the trend. Ark, the tech permabull, reduced its Twitter position. Cathie Wood just said she started selling after @jack stepped down as CEO. Interesting times.
Truth of the matter is before Elon ever gets Twitter another tech giant will buy it without hesitation.
They should sell to him because all he is doing is either buying Twitter at fair value or doing pre-launch hype for a competitor which will include the accumulation of other platforms including Trump’s Truth social, shit like substack, which he can easily get for less than 10 billion, Mastadon, etc.
A company is not a bag of potatoes in the market to sell at the whims of the highest bidder.
Here is what would be looking after their fiduciary duties:
The company had a loss of 200 million dollars this year. Was only profitable 2 years out of its 16 years of existence. The board should state that Twitter in the hands of Elon Musk, could jeopardize its current unique and somewhat also precarious, place in social media.
The company should ask Elon Musk, to first explain to shareholders what he plans to do with the company, and how it would benefit them. Provide details on shape and form of how his plan would be implemented. Until then, rejecting the offer is looking after their fiduciary duties.
Deep state via its pension funds that have unlimited access to free cash from Fed in cases like this, will long Twitter. This bidding war cannot be won by Musk. He probably factored this in, and will take significant profit once he dumps his share as he promised. Hopefully that would go towards funding a Twitter alternative.
> Boards have a fiduciary duty to the shareholders. As an all-cash offer, this generates for the shareholders a substantial return with NO RISK, and so the board has a serious legal obligation to carefully review this offer and make a decision.
The fact that their primary concern has to be for their shareholders and not whether the sale will be good at all for the rest of humanity is a huge problem in my eyes.
Let's ignore personality and societal issues for a moment and look at the value proposition. The 'best and final offer' of $54.20 per share is just too low to be acceptable for major investors.
Just over year ago, Twitter shares traded at about $70 per share. Musk's offer is about 25% lower than last years peak. There's no reason to assume Twitter shares can't reach the same levels ever again, nothing much has changed fundamentally over a year.
Musk's offer is a cash only offer. $43 billion is a lot of cash. That's a lot of Tesla shares to sell, or massive loan. If Musk thinks Twitter is that valuable to take such risks, current major investors will probably want to unlock that value themselves.
I think the takeover offer is just as believable as last week's announcement that Musk was joining the Twitter board.
I personally think this is excellent, in the great scheme of things, maybe this will open a real discussion about the real oligarchic nature of the US political and societal life at the top.
I mean, with tech titan (and second wealthiest man on the planet) Bezos owning the WaPo, the moment the tech titan (and the wealthiest man on the planet) Musk will put his hands on Twitter hopefully will also be the moment of some "enlightenment" for the educated masses. Or maybe I'm just day-dreaming.
Chris Anderson of TED asked Elon a lot of the questions and concerns being discussed here. Check it out if you want to understand his perspective and goals with twitter.
“Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization”
To that end, he committed to transparency. For example, changes to tweets or users would be made visible and apparent so there's no more behind the scenes manipulation. The algorithm itself would be open sourced. Anyone could view it on Github and suggest changes or point out issues.
This is standard operating procedure for takeovers, but I think you're massively overestimating the amount of pressure someone selling 9% of the company places on the stock price. Someone buying 9% (with an expecation that they would buy more) moved the stock $10. The same person selling 9% stock (with no possibility that can sell more) is unlikely to move the stock more than that.
Seems like an amazing move by Elon. Buy a sizable portion of the business to hold hostage, and then make the company an offer that they essentially can’t refuse because of fiduciary responsibility. If they reject Elon’s offer the stock price will sink like a rock. They pretty much have to take it.
It will hit back at 40$ is as if the Elon pump never happened, is that so bad? However, it does create pressure from “activitists” to sell to Elon. The main thing is: Is Elon a good leader for Twitter. There is a lot of positives because Elon has already proven himself in multiple companies, plus he understands Twitter as much as anyone from his use of it
On the other hand - the stock was flat over the time that he bought... So not in total agreement with you on the stock impact of his selling. It seems like the only impact is the headline risk - and not so much actual selling pressure.
Just to verify that I understood the concept I looked up the definition of "hostile takeover" from various places, its common theme is taking over a company without approval of the board.
The actual offer states [0]:
>As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced. My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder.
Which means he is asking for approval, which seems to contradict the headline and the quote from Mirabaud Equity Research which was used to make the headline more sensational as they were quoted saying “This becomes a hostile takeover offer which is going to cost a serious amount of cash”.
If the board disapproves of the offer and he acquires a larger stake of ownership, that would be more inline with what a hostile takeover is.
Can anybody make a good argument as to why Twitter (in its current form) isn’t a major detriment to society?
If Twitter poofed out of existence today, it would be a major win for this planet. People talk about a frightening future with a human hostile AI that wants to destroy humanity. That exists, it’s twitter.
Elon buying it, even if he runs it into the ground is a good thing. Getting rid of some of the hostile AI is a good thing.
I bet some of those who advocated "it's a private company, it can deplatform whoever it wants" are probably re-thinking their stance on deplatforming from a major social media.
> The takeover is unlikely to be a drawn out process. “If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder,” said Musk.
It's hard to navigate comments, but I cannot find the important stuff being discussed. I mean: how the hell can he even remotely viably secure $43B in cash?! All this "$200B net worth" is pretty much bullshit — it's multiplying current stock price by the amount he holds. (Hugely overpriced stock, in his case.) Sure, he can borrow insane amounts of money using this stock as a leverage, but no way it can be even close to $40B! Right?
I think social media is a real negative force in the world and welcome this as potentially a way to make it better, or at least destroy Twitter and remove one outlet.
I don’t think public companies can reform social media because it’s too profitable. As a private company it may be possible to reform it to still be profitable, but not in a way that harms people.
> As an all-cash offer, this generates for the shareholders a substantial return with NO RISK, and so the board has a serious legal obligation to carefully review this offer and make a decision.
What a gut check. I'm sure this is an obvious comment by now, but seeing the board's response to turning down something like this is going to be an olympic level display of mental gymnastics. Exciting times.
Journalists and bluechecks seem to be particularly mad about this. I guess they don't like the prospect of having to follow rules that are transparently enforced rather than the current system of favoritism and opacity
What he did today is thousand times better than shelling money behind the charity that many billionaires doing. Under Elon twitter can enable true "freedom of expression." Parag's one sided stand to enable woke culture, and board's support to that clearly showing how extreme right mindset they have when running this company. Today we can't hear the voice of other side on this platform, they are either shutdown or suspended even if you are former prez https://twitter.com/jack/status/651003891153108997
I believe this is not a hostile takeover. It's an unsolicited bid to purchase the company directly to the board. A hostile takeover would involve a tender or purchases directly to shareholders to purchase stocks ignoring the board or likely against the wishes of the board.
This is exactly why individuals should not be allowed to have tens (let alone hundreds!) of billions of dollars in wealth - they become all-powerful and too easily subvert the will of the people. They become their own ruling class, which is unacceptable in a functioning democracy.
He actually dismissed Twitter’s management so I am guessing they’re slated to be demoted or fired if he takes over. Should they sell? I mean it’s such a bizarrely undervalued company. It’s like buying a plot of land on fifth avenue that’s owned by a convenience store and the store owner wants to charge for a skyscraper market rate.
For $1B he could make an exact twitter clone, and he could probably do it for much less than that. You might say, yes, but he's paying for the brand, and no one would use his clone. He could pay for a flood of advertising and other promotions to get people to switch. He could pay 42,000,000 people $1000 each to switch to his twitter clone.
[+] [-] dang|3 years ago|reply
I'm going to prune some of the top-heavy subthreads and possibly restrict the page size a bit. There are over 2500 comments in this thread, and if you want to read them all you're going to have to click "More" at the bottom of each page, or go like this:
https://news.ycombinator.com/item?id=31025061&p=2
https://news.ycombinator.com/item?id=31025061&p=3
https://news.ycombinator.com/item?id=31025061&p=4
https://news.ycombinator.com/item?id=31025061&p=5
...and so on. Sorry everyone! (Yes, fixes are coming, yes it's all very slow.)
Edit: also, if some of you would log out for the day, that would ease the load considerably. (I hate to ask that, but it's true. Make sure you haven't lost your password!)
[+] [-] gunapologist99|3 years ago|reply
But, despite an absolutely incredible roller-coaster news cycle, things have been definitely trending down at Twitter ($33/share last month), which was reflected in its share price. The current executive team (and Dorsey) had wasted time focusing on things that didn't matter instead of things that did matter.
Boards have several fiduciary duties to the shareholders. As an all-cash offer, this generates for the shareholders a substantial return with NO RISK, and so the board has a serious legal obligation to carefully review this offer and make a decision.
If the board elects to reject this offer, then their reasons for doing so need to be very clearly elucidated, because, as Twitter is a public company, they would have to see something in their crystal ball that the rest of the market does not.
[+] [-] DelaneyM|3 years ago|reply
To make a successful hostile bid, you need to pay not just "more than the current price", but "more than the holders of 50% of current shares believe the company to be worth". Usually bidders use analyst price targets to guess at the distribution of holders' internal price targets.
This is what makes it so difficult, and why this bid is very likely to be rejected.
(This is easier to explain with a white board, tbh.)
[+] [-] randyrand|3 years ago|reply
Shareholder interest =/= money. Shareholder votes allow other considerations can be taken into account.
I agree with your comment, but it's not that hard to reject IMO.
[+] [-] AlexandrB|3 years ago|reply
Edit: I also wonder how leveraged positions, especially shorts, get resolved.
[+] [-] spiantino|3 years ago|reply
Maybe it's different with a poison pill in place as the onus is on the board, but I don't think its obvious what the board should/will do
[+] [-] s17n|3 years ago|reply
[+] [-] dkjaudyeqooe|3 years ago|reply
A coincidence? A week out from 4/20?
[+] [-] coffeeblack|3 years ago|reply
[+] [-] meerita|3 years ago|reply
[+] [-] mike00632|3 years ago|reply
There is a very clear risk of transformating the social media titan that is Twitter into Truth Social, a sideshow of a forum that is dedicated to the worship of one man. That would plummet the stock price.
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] namesbc|3 years ago|reply
[+] [-] la6472|3 years ago|reply
https://nypost.com/2022/04/27/conservatives-see-spike-in-fol...
[+] [-] alecco|3 years ago|reply
[+] [-] memish|3 years ago|reply
[+] [-] crate_barre|3 years ago|reply
They should sell to him because all he is doing is either buying Twitter at fair value or doing pre-launch hype for a competitor which will include the accumulation of other platforms including Trump’s Truth social, shit like substack, which he can easily get for less than 10 billion, Mastadon, etc.
[+] [-] belter|3 years ago|reply
Here is what would be looking after their fiduciary duties:
The company had a loss of 200 million dollars this year. Was only profitable 2 years out of its 16 years of existence. The board should state that Twitter in the hands of Elon Musk, could jeopardize its current unique and somewhat also precarious, place in social media.
The company should ask Elon Musk, to first explain to shareholders what he plans to do with the company, and how it would benefit them. Provide details on shape and form of how his plan would be implemented. Until then, rejecting the offer is looking after their fiduciary duties.
[+] [-] bspear|3 years ago|reply
[+] [-] cft|3 years ago|reply
[+] [-] MrMan|3 years ago|reply
[+] [-] shitpostbot|3 years ago|reply
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[+] [-] jtdev|3 years ago|reply
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[+] [-] GoodJokes|3 years ago|reply
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[+] [-] babypuncher|3 years ago|reply
The fact that their primary concern has to be for their shareholders and not whether the sale will be good at all for the rest of humanity is a huge problem in my eyes.
[+] [-] mikestew|3 years ago|reply
[citation needed] on that "legal obligation" myth that is continually propagated. As a real-life example, there's Microsoft's offer to Yahoo.
[+] [-] yabatopia|3 years ago|reply
Just over year ago, Twitter shares traded at about $70 per share. Musk's offer is about 25% lower than last years peak. There's no reason to assume Twitter shares can't reach the same levels ever again, nothing much has changed fundamentally over a year.
Musk's offer is a cash only offer. $43 billion is a lot of cash. That's a lot of Tesla shares to sell, or massive loan. If Musk thinks Twitter is that valuable to take such risks, current major investors will probably want to unlock that value themselves.
I think the takeover offer is just as believable as last week's announcement that Musk was joining the Twitter board.
[+] [-] paganel|3 years ago|reply
I mean, with tech titan (and second wealthiest man on the planet) Bezos owning the WaPo, the moment the tech titan (and the wealthiest man on the planet) Musk will put his hands on Twitter hopefully will also be the moment of some "enlightenment" for the educated masses. Or maybe I'm just day-dreaming.
[+] [-] memish|3 years ago|reply
“Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization”
To that end, he committed to transparency. For example, changes to tweets or users would be made visible and apparent so there's no more behind the scenes manipulation. The algorithm itself would be open sourced. Anyone could view it on Github and suggest changes or point out issues.
https://youtu.be/cdZZpaB2kDM?t=666
[+] [-] RustyConsul|3 years ago|reply
Thats an immense amount of selling pressure on the stock... This is a threat. He's negotiating with a gun to their head.
[+] [-] williamsmj|3 years ago|reply
[+] [-] ryanSrich|3 years ago|reply
[+] [-] m3kw9|3 years ago|reply
[+] [-] thebradbain|3 years ago|reply
[+] [-] anonu|3 years ago|reply
[+] [-] hayd|3 years ago|reply
[+] [-] molticrystal|3 years ago|reply
The actual offer states [0]:
>As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced. My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder.
Which means he is asking for approval, which seems to contradict the headline and the quote from Mirabaud Equity Research which was used to make the headline more sensational as they were quoted saying “This becomes a hostile takeover offer which is going to cost a serious amount of cash”.
If the board disapproves of the offer and he acquires a larger stake of ownership, that would be more inline with what a hostile takeover is.
[0] https://www.sec.gov/Archives/edgar/data/0001418091/000110465...
[+] [-] thepasswordis|3 years ago|reply
If Twitter poofed out of existence today, it would be a major win for this planet. People talk about a frightening future with a human hostile AI that wants to destroy humanity. That exists, it’s twitter.
Elon buying it, even if he runs it into the ground is a good thing. Getting rid of some of the hostile AI is a good thing.
[+] [-] dgudkov|3 years ago|reply
[+] [-] zegl|3 years ago|reply
Is he holding his own existing shares as hostage?
[+] [-] krick|3 years ago|reply
[+] [-] prepend|3 years ago|reply
I don’t think public companies can reform social media because it’s too profitable. As a private company it may be possible to reform it to still be profitable, but not in a way that harms people.
[+] [-] no-dr-onboard|3 years ago|reply
What a gut check. I'm sure this is an obvious comment by now, but seeing the board's response to turning down something like this is going to be an olympic level display of mental gymnastics. Exciting times.
[+] [-] voldacar|3 years ago|reply
[+] [-] thebackstall17|3 years ago|reply
[+] [-] dolekemp96|3 years ago|reply
[+] [-] cgtyoder|3 years ago|reply
[+] [-] lvl102|3 years ago|reply
[+] [-] exikyut|3 years ago|reply
> "There will be distractions ahead ... let's tune out the noise and stay focused on the work and what we're building"
from the other day (https://news.ycombinator.com/item?id=30984215) meant...
[+] [-] tbirdny|3 years ago|reply