Under the new structure, if any person or group acquires beneficial ownership of at least 15% of Twitter’s outstanding common stock without the board’s approval, other shareholders will be allowed to purchase additional shares at a discount. The plan is set to expire on April 14, 2023.
Such a move is a common way to fend off a potential hostile takeover by diluting the stake of the entity eying the takeover. “The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders,” the company said in a press release.
It doesn't really stop Musk from increasing his stake, it would just basically do two things:
- dilute the percentage of shares he owns
- dilute the value of the current shares
The idea of course is that whatever Musk pays for the new shares, they would immediately be worth less when the discounted shares are introduced into the market. But it would also mean everyone's shares would be worth less.
Now this certainly could convince Musk to not buy up more shares on the open market, but if he does decide to do so this could potentially mean that thousands and thousands of stockholders not in a position to purchase more shares would simply lose value. They probably will lose value even if they are allowed to buy discounted stock.
It is a classic cut off your nose to spite your own face move.... and one that seems fairly negative to the average shareholder with no apparent investment upside.
Imagine the scenario. Twitter board of directors will almost certain turn down the Musk offer to purchase Twitter for about 35% more than it is currently worth, meaning every twitter shareholder would miss out on a 35% profit on their investment.
Then Musk decides to make another large purchase of Twitter, triggering the poison pill and leading to a slew of people buying the stock at a discounted rate and diluting the share value. Instead of a 35% profit, many of these investors probably see a significant "drop" in the stock value. All because the board of directors are more interested in political control of Twitter than they are in looking out for the shareholders.
19 comments:
Doe Ch really think people are all that interested in the Musk machinations?
Trump Plunges Into GOP Primaries with Risky Picks
April 16, 2022 at 8:04 am EDT By Taegan Goddard 54 Comments
Washington Post:
“With his endorsements of Oz, Senate candidate Ted Budd in North Carolina, gubernatorial hopeful David Perdue in Georgia and, on Friday, author and Senate candidate J.D. Vance in Ohio, Trump has leaped into the middle of several competitive primaries that could put his desired image as a kingmaker at risk. DEAR, DEAR!
“In key contests, Trump’s statements have not cleared the field like they once did OH DEAR! — and some advisers fear he has diluted his endorsements by backing hundreds of candidates, LOL some for low-level positions, because of their willingness to support his false claims of a fraudulent election.”
FALSE? FRAUDULENT? FAKE?
The Guardian:
Will Trump’s “reckless” endorsements be a referendum on his political power?
EX PREZ AND EX KINGMAKER?
Cernovich
https://twitter.com/Cernovich/status/1515068572493496322
Hi @elonmusk, have you considered that Twitter is blocking your offer because they are afraid you’d obtain documents proving they shadow ban and censor, which would contradict sworn testimony made before Congress?
This could be an Enron type scenario you’ve uncovered.
I see the charlatan is already spamming this thread from post one with his Gospel According to Goddard
Glenn Greenwald
https://twitter.com/ggreenwald/status/1514942552985808899
How dumb do you have to be to believe that journalists - who work at Bloomberg and the Bezos-owned WPost or Comcast or CNN - are worried about billionaires controlling media (π€£).
They're only petrified that the *wrong* billionaire, one who may not censor for them, might reign.
Or other oligarchs like the current Twitter CEO or owner of the Atlantic or Zuckerberg or Gates...
Ot the unbelievable amount of money Soros has spent
without paying taxes...
Richard Grenell
https://twitter.com/RichardGrenell/status/1515106596308852740
Remember that @twitter has a board member named Dr. Fei-Fei Li, a Chinese Communist Party-Linked official as an ‘Independent Advisor’.
https://www.rfa.org/english/news/china/concern-05202020134312.html
Twitter shareholders would win a lawsuit against the bod
Ben-Ghiat: One of the big talking points and strategy of right-wing authoritarianism, is to label democratic systems as tyrannical. Mussolini was the first to say that democracies are tyrannical, democracies are the problem. And there’s a whole century’s worth of the strategy of calling sitting Democrats, who you want to overthrow, dictators. Biden as a social dictator, [is] a phony talking point. It has so many articulations from “They’re forcing us to wear masks.” And you have people like DeSantis who are doing this very subversive thing of saying, “Florida’s the free state. You can have refuge from the dictatorship of Biden here.” And what this is designed to do is discredit the sitting democratic administration in order to create, a myth of freedom. January 6 was actually marketed as the violence [being] in the service of freedom, and you were overthrowing a dictator.
Kruse: Where is Trump in his own timeline? Is he in your estimation getting weaker, getting stronger, in a holding pattern?
Ben-Ghiat: The genius of the “big lie” was not only that it sparked a movement that ended up with January 6 to physically allow him to stay in office. But psychologically the “big lie” was very important because it prevented his propagandized followers from having to reckon with the fact that he lost. And it maintains him as their hero, as their winner, as the invincible Trump, but also as the wronged Trump, the victim. Victimhood is extremely important for all autocrats. They always have to be the biggest victim.
So the “big lie” maintained Trump’s personality cult versus seeing him as just another president who was voted out of office. Americans traditionally always accepted that when your time is up, no matter how popular you were, you were gone. Trump disrupted that because he’s different from any other president, Republican or Democrat. He’s an authoritarian, and they can’t leave office. They don’t have good endings and they don’t leave properly. And I predicted — I had to turn in [my] book in the summer of 2020 — and I just predicted that he wouldn’t leave in a quiet manner. The “big lie” allowed him to psychologically never leave. So he’s in this kind of limbo. As an authoritarian, his other job has been to make sure to keep hold of the party so no rivals emerge, so that he could [not] be eclipsed by a younger version of himself. And that would be DeSantis.
Twitter is trying to thwart billionaire Elon Musk's takeover attempt with a “poison pill" — a financial device that companies have been wielding against unwelcome suitors for decades.
WHAT ARE POISON PILLS SUPPOSED TO DO?
The ingredients of each poison pill vary, but they're all designed to give corporate boards an option to flood the market with so much newly created stock that a takeover becomes prohibitively expensive. The strategy was popularized back in the 1980s when publicly held companies were being stalked by corporate raiders such as Carl Icahn — now more frequently described as “activist investors."
Twitter didn't disclose the details of its poison pill Friday, but said it would provide more information in a forthcoming filing with the Securities and Exchange Commission, which the company delayed because public markets were closed Friday.
Since his own attempt to get the same attention on Twitter failed, one of his supporters has been trying to buy it so he can spread the big lie to millions of lower educated people like rrb and kputz
https://www.miamiherald.com/news/business/article260475642.html
The board of directors don't want a right wing nutcase. They have the right to make the decision.
PROVIDENCE, R.I. (AP) — Twitter said Friday that its board of directors has unanimously adopted a “poison pill” defense in response to Tesla CEO Elon Musk’s proposal to buy the company for more than $43 billion and take it private.
The move would allow existing Twitter shareholders — except for Musk — to buy additional shares at a discount, thereby diluting Musk’s stake in the company and making it harder for him to corral a majority of shareholder votes in favor of the acquisition.
Twitter’s plan would take effect if Musk’s roughly 9% stake grows to 15% or more.
The poison pill injects another twist into a melodrama surrounding the possibility of the world’s richest person taking over a social media platform he described Thursday as the world’s “de facto town square.”
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Twitter said its plan would reduce the likelihood that any one person can gain control of the company without either paying shareholders a premium or giving the board more time to evaluate an offer. Such defenses, formally called shareholder rights plans, are used to prevent the hostile takeover of a corporation by making any acquisition prohibitively expensive for the bidder
We already have two major propaganda institutions, Fox and Newsmax..
Scott wants another one.
There is only one way for Twitter to exist as a viable entity, people are now starting to realize this.
What matters to the people behind Twitter, the people who are subsidizing the ability of Twitter to exist, is control over the global conversation.
Control of the conversation is priceless to the people who provide the backbone for Twitter.
Once people realize who is subsidizing Twitter, everything changes.
That’s the fight.
That someone would have to be the U.S. government, Sundance has argued earlier, because the platform can only be subsidized by an entity with the resources of the U.S. government to make the operation work at all, it doesn't turn a profit when it gains more users, and more users only add to its huge server expenses. He wrote about that here.
If it's true, it would explain the callous behavior of the Twitter board towards its small shareholders, and its indifference to company profit and value in general. Government is about power, business is about money, yet these Twitter elites are saying that power matters more to them than money. That's weird stuff coming from a business. They don't seem to operate on a profit basis and anyone involved with this company is a victim.
The board of directors don't want a right wing nutcase. They have the right to make the decision.
Their responsibility is to their shareholders... and 100% about the finance of Twitter and the shareholders. Does it make fiscal sense to sell or not. Who they sell "too" is literally of no importance to a board of a public company.
They would be sued ten times over and likely tossed in jail if they say accepted a private takeover offer for less money from someone they thought was more politically appropriate.
They do not have the right to force shareholders to take any sort of loss over politics.
Funny Roger...
How many times did you say that Twitter was a "private" company? You didn't even realize till Musk made a takeover attempt that Twitter is a public (not private) business. You still are working under the impression that the people who run Twitter "own it" - they are at best borrowing controlling interest until they are replaced with someone else. The board does not "own" Twitter and neither does the President.
Poison pill or not, Musk has the sort of money to simply keep buying up the shares till he owns enough to win a proxy fight to take control. He likely owns more of Twitter right now than the President and entire board all together.
So literally your previous argument (that the owner of Twitter can do what they want) is now turned on its head. You now will argue that the biggest owner of Twitter should have "no" say and the people just temporarily in charge of Twitter should have all of it?
What is your true stance, other than be drug around by your nose by the politics of it all?
kevin haddad
https://twitter.com/kevinhaddad08/status/1514953588086239234
Should Elon Musk make an offer to George Soros to buy the Democratic Party?
too soon ?
* maybe Musk can just form a "charitable" organization called America's Free Speech Movement or whatever Soros would call them and even not have to pay any taxes when he buys Twitter
Libs love those tactics
Erich Hartmann
https://twitter.com/erichhartmann/status/1514706423326060544
So let me get this straight: The progressive left is now rooting FOR Saudi Arabia, Wall Street, Vanguard / Blackrock and AGAINST free speech, liberty and the dude who makes electric cars and is going to Mars?
wut
they sure flipped
Jack Posobiec ☦️
https://mobile.twitter.com/JackPosobiec/status/1515023480445718531
The media is literally going to say that Twitter is ‘saving democracy’ by refusing to allow the shareholders to *vote* on Elon’s deal
Go back and re-read that a few times
Avik Roy πΊπ¦
https://mobile.twitter.com/Avik/status/1514998309190049795
According to my sources, the SEC/DOJ "investigation" of @ElonMusk is timed to thwart his bid for @Twitter. Normally, in the absence of a better offer, Twitter's board is effectively obligated by its fiduciary duty to shareholders to accept Musk's offer. If true, it's scandalous.
"democracy" under Biden
1984
David Sacks
https://twitter.com/DavidSacks/status/1515363131249213444
New Twitter CEO Checklist
- Open-source the algorithm
- Eliminate all bots
- Restore free speech
- Implement Coinbase policy on workplace politics
- Fire useless employees (50%?)
- No more company-wide days of rest (take vacation if you’re tired)
not a bad proposal
I'd open source the "trending" and its descriptions too
Maybe make them actually based on trends
and don't touch them
Blogger Honest, decent, truthful Rev. said...
Doe Ch really think people are all that interested in the Musk machinations?
Well pederast, every blue-check leftist on the platform had an absolute conniption fit upon the announcement, some like Max Boot making complete fucking fools of themselves. So yeah, I'd say more than a few people are interested.
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