At 27:00 in the TED interview he speaks explicitly about being blackmailed by the SEC and banks over the earlier offer to take Tesla private. âI was forced to concede to the SEC, unlawfullyâthose bastardsâand now theyâve made it to look like I lied when I did not, in fact, lie.â
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This reminds me of The 90s when âwe were living on Internet Timeâ.
Today, Elon warped time!
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Coincidentally, the taking Tesla private tweet involved hypothetical Saudi funding.
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âŠâtitanic in scaleâ. Interestingly, the Titanic struck the iceberg on 1912-04-14, 110 years ago to the day.
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@johnwalker, If the board believes that the actual value is greater than $54.20 per share, do they have a fiduciary duty to engage in a stock buyback at the current lower price?
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All of my knowledge of U.S. takeover law and regulations is at least 30 years out of date, and in addition I donât know what anti-takeover measures the board may have previously adopted or are implied by the Delaware corporate code that may affect the handling of a bid.
In the old days, a corporate buccaneer would simply file a public tender offer to all shareholders to buy their stock for a fixed price by a defined closing date, with the offer expiring if the requested number of shares were not tendered in time. This is rarely done today, with most deals being done at the board level with entanglement of anti-takeover measures, âpoison pillâ provisions by the target, and complex leveraged financing arrangements or stock payments on the part of the acquirer. Elon Musk is one of the few people who could actually mount a pure cash tender offer, in which case the boardâs role would simply be to recommend whether shareholders accept or reject it.
Generally, thereâs pretty broad discretion for boards in takeover negotiations, although just about any decision they make is going to end up the object of shareholder suits filed by the San Diego contingency fee guys on behalf of one or two cat lady shareholders representing the class of everybody who owns the stock.
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The Twitter Board of Directors has adopted a âpoison pillâ provision, euphemistically called a âshareholder right planâ, as described in this press release dated 2022-04-15, âTwitter Adopts Limited Duration Shareholder Rights Plan, Enabling All Shareholders to Realize Full Value of Companyâ.
The Rights Plan is similar to other plans adopted by publicly held companies in comparable circumstances. Under the Rights Plan, the rights will become exercisable if an entity, person or group acquires beneficial ownership of 15% or more of Twitterâs outstanding common stock in a transaction not approved by the Board. In the event that the rights become exercisable due to the triggering ownership threshold being crossed, each right will entitle its holder (other than the person, entity or group triggering the Rights Plan, whose rights will become void and will not be exercisable) to purchase, at the then-current exercise price, additional shares of common stock having a then-current market value of twice the exercise price of the right.
Details of the scheme are to be described in a Form 8-K filing with the Securities and Exchange Commission (SEC). As of 19:13 UTC on 2022-04-15, no such filing is listed in the SEC database.
This is one of those anti-shareholder rights provisions which give U.S. corporate governance its well-deserved reputation as being worthy of an empire of almost a third of a billion grifters. Basically, what âshareholder democracyâ means in that jurisdiction is that itâs perfectly fine for a corporate board to, should any investor of whom they disapprove acquire 15% or more of the companyâs shares, to issue new shares to all of the other existing investors but not the takeover whale, diluting their investment and effective stealing the value of the investment they dislike.
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Isnât this also tanking the share price, given the EPS is effectively nearly halved? So if the market remains rational (haha, I know, right?) you would expect the PE ratio to track nearly constant absent any other material events?
The equal opportunity ambulance chasing attorneys looking for class action lawsuits are probably licking their chops and chanting âdo it, do it, do itâŠâ
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The share price will fall due to the dilution, but since all of the non-hostile shareholders receive extra shares, the value of their investment is unchanged. This is exactly like a stock split, except there is discrimination against the person attempting the acquisition, who is diluted without compensation. I would think that the investor whose pocket was thus picked would have a cause of action against the company (and maybe they do), but this gimmick has apparently been used by other companies without the SEC intervening.
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Why does the Board not approve the transaction? Is it because Elon Musk is technically an African-American? The potential for discrimination is unacceptable! This would make a great Supreme Court case â if the US actually had a Supreme Court.
Just a random thought â what if Mr. Musk got four of his friends to proceed independently, quietly buying shares until they each had something below the 15% share limit but collectively the five together had more than 50%? Then simply vote the Board out and fire all the executives; hire the nastiest lawyers to check every expense claim & every business decision the Board & executives ever made, and pursue any questionable acts in civil & criminal proceedings; throw out the poison pill; and offer the other shareholders a fair price to take Twitter private.
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I havenât seen the details of the provision adopted by the board (which hasnât yet been filed with the SEC on an 8-K), nor am I familiar with securities statutes and case law regarding such deals, so this is just speculation. There may be some kind of provision about âstructuringâ of transactions to avoid concentration in the same way that breaking up cash transactions into tranches small enough to evade bank reporting requirements is criminal. But they may not have plugged that hole.
An interesting speculation I saw earlier today is that one of the reasons Twitter may have denied Musk a seat on the board and resisted the takeover so vehemently is that once he is empowered he could bring a proxy vote on forcing Twitter to disclose all of their actions in shadow-banning, wiping followers, and otherwise discriminating on content which would expose perjury by senior executives including former CEO Twitter Homeless and Twitter Apu under oath in congressional testimony. If the present situation ends up in court, it will be interesting to see if Musk can compel disclosure of such information as part of discovery.
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And then we have this: New York Post: âElon Musk considering bringing in partners on Twitter bid, sources sayâ.
Elon Musk is speaking to investors who could partner with him on a bid for Twitter, sources close to the matter told The Post.
A new plan that includes partners could be announced within days, those sources said.
One possibility, the sources said: teaming with private-equity firm Silver Lake Partners, which was planning to co-invest with him in 2018 when he was considering taking Tesla private.
âź
Twitter hasnât yet filed its shareholder rights plan with the SEC, though it announced the poison pill in a statement. The SEC filing will give more details on whether it prevents like-minded investors from teaming to buy a greater than 15% stake.
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The whom they disapprove is critical. I doubt it applies to Blackrock, State Street or Vanguard.
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trolling level 100
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How long until plan z, where elon sells all shares and joins a competitor of twitter and leaves twitter in their self imposed bird cage, on titanic sinking ship of woke fools!
The U.S. Congress used to have the power to protect free speech ⊠a long, long time ago!
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ROTFL
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Torba to Musk:
What we are missing at the moment is an ISP. I fear that the next big leap of censorship is at the ISP level, with ISPâs blocking access to Gab.com. You solve that problem with Starlink. Together we can build infrastructure for a free speech internet.
I am willing to offer you a Board seat along with equity in the company in exchange for you selling your Twitter position and investing $2B into Gab. My offer is my best and final offer.(Gab.comâs Offer To Elon Musk â Gab News)
Seems like weâve been here before:
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In comment #46 on 2022-04-15, I discussed the possibility of Elon Musk launching an old-style public tender offer for Twitter shares from other investors. Interestingly, the next day, he tweeted:
Today, Reuters noted, âMusk tweets âLove Me Tenderâ days after Twitter takeover offerâ and quoted another tweet in which he said, âIt would be utterly indefensible not to put this offer to a shareholder voteâ.
Now, a traditional tender offer would run afoul of the âpoison pillâ provision adopted by Twitterâs board, if that withstood a challenge mounted by Musk, but another possibility remains which is even more venerable, a âproxy fightâ (as opposed to a proxy war, which is something else entirely). In a proxy fight one or more shareholders solicits proxies from other shareholders, granting the solicitor the power to vote their shares on a matter of corporate governance, for example, repealing the poison pill or replacing the companyâs management entirely. As ownership of the shares remains with the grantors of the proxies, this would not trigger the poison pill. Large institutional investors traditionally vote with management in proxy fights, but Musk could solicit proxies from private shareholders, arguing that his acquisition would increase the value of their shares beyond the expectations for the performance of incumbent management.
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Twitter 8-K with poison pill
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001418091/000119312522107462/d296740d8k.htm
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