BMX Bandit said:Premium said:
So what kind of legal trouble could the board be in for not selling?
If Goldman report says value is at or above that, none really.
But doesn't Goldman have Twitter listed at a value in the low 30's and a sell?
Elon makes all-cash offer to take Twitter private
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But doesn't Goldman have Twitter listed at a value in the low 30's and a sell?
FTAG 2000 said:
They'd rather burn it down than sell.
And Elon just handed them a flamethrower.
Next step will be a class action filed by shareholders seeing the value of their stocks decreased by a lack of fiduciary duty by the Board.
Could be a great marketing ploy by Elon to sell more of these bad boys.
Goldman is in deep **** with this too.BMX Bandit said:Premium said:
So what kind of legal trouble could the board be in for not selling?
If Goldman report says value is at or above that, none really.
They recently issued a report saying Twitter stock should be $30. If they come back higher to help save Twitter, then what? Did they issue an inaccurate report to manipulate the stock price (enter the SEC, shareholders), or are they lying now on price?
Thats a different report. Recommending buy/sell is not same as company valuation
Quote:
Goldman is in deep **** with this too.
They recently issued a report saying Twitter stock should be $30. If they come back higher to help save Twitter, then what? Did they issue an inaccurate report to manipulate the stock price (enter the SEC, shareholders), or are they lying now on price?
Understood.
This is Twitter throwing a temper tantrum. At this point there's no going back - either Musk or someone else will buy them IMO. If the board refuses the lawsuits will be flying and force them to sell regardless. They are up s**t creek without a paddle and someone will come in and scoop up the remains.
There are several ways this can bite them in the ass. First off a shareholder rights plan cannot dilute the stakes acquired before they were adopted, so they can't reverse the accumulation of shares by Musk or any other potential buyers. It can and likely will tank the stock.
Now by pulling this move aimed at discouraging a motivated buyer like Musk from buying more company stock, a shareholder rights plan can and will likely to leave a share price lower than it would be otherwise, at the very least in the short run but it can literally kill the company if it goes real bad.
But think about this decision they made from this standpoint a Poison pill can also shield entrenched and underperforming company managers from shareholder efforts to replace them. So there's alternative motivation here.
The good news on that score is that since shareholder rights plans are adopted by company boards, replacing a board in a proxy contest can make a poison pill go away if the new board so chooses.
Because poison pills discriminate against hostile buyers and restrain trading in a company's stock, setting a 15% stop trigger, they typically require justification, and always have sunset provisions. So this is still a game of meskin sweat we will see who blinks first.
Now by pulling this move aimed at discouraging a motivated buyer like Musk from buying more company stock, a shareholder rights plan can and will likely to leave a share price lower than it would be otherwise, at the very least in the short run but it can literally kill the company if it goes real bad.
But think about this decision they made from this standpoint a Poison pill can also shield entrenched and underperforming company managers from shareholder efforts to replace them. So there's alternative motivation here.
The good news on that score is that since shareholder rights plans are adopted by company boards, replacing a board in a proxy contest can make a poison pill go away if the new board so chooses.
Because poison pills discriminate against hostile buyers and restrain trading in a company's stock, setting a 15% stop trigger, they typically require justification, and always have sunset provisions. So this is still a game of meskin sweat we will see who blinks first.
“Never argue with stupid people, they will drag you down to their level and then beat you with experience" - Mark Twain
In don't think they will be forced to sell the whole company, but you will see massive sell off by investors which will drive the price down considerably
Twitter is not like a RJR Nabisco with all sorts of divisions and different revenue streams. There's no break-up value there, AFAIK.BMX Bandit said:
Thats a different report. Recommending buy/sell is not same as company valuation
And their goodwill value just went out of the window.
It does buy Twitter some more time though. They could still take Musk's offer, this just prevents him from starting to add to his position without the board approving it.
But at least they'll still have their culture!javajaws said:
This is Twitter throwing a temper tantrum. At this point there's no going back - either Musk or someone else will buy them IMO. If the board refuses the lawsuits will be flying and force them to sell regardless. They are up s**t creek without a paddle and someone will come in and scoop up the remains.
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I can't wait to see Elon's plan B.
He's already wargamed this thing.
He's already wargamed this thing.
Liberal ideas and people are like the Premier cigarettes...aggiehawg said:Twitter is not like a RJR Nabisco with all sorts of divisions and different revenue streams. There's no break-up value there, AFAIK.BMX Bandit said:
Thats a different report. Recommending buy/sell is not same as company valuation
And their goodwill value just went out of the window.
Twitter has now effectively become this
“Never argue with stupid people, they will drag you down to their level and then beat you with experience" - Mark Twain
Yeah, he's not playing checkers here. He either takes over twitter, or removes it from the space and starts his own. Ready to launch within days, if not hours.FTAG 2000 said:
I can't wait to see Elon's plan B.
He's already wargamed this thing.
Would this also kick in retroactively? Let's say Elon thought about this and made a huge buy earlier this week to take him beyond the 15%.will25u said:
Can someone explain in common terms? I read the link BMX posted, but am not 100% sure I know what it means.
If someone buys more than 15% of the total stock, this kicks in. But how does that affect the offer to buy 100% at $54.20?
And what options does this give/take away from the BOD or EM?
Maybe two or three silent allies who buy up to 14.9% and then replaces the board, removing the poison pill and then $$$FTAG 2000 said:
I can't wait to see Elon's plan B.
He's already wargamed this thing.
Seven and three are ten, not only now, but forever. There has never been a time when seven and three were not ten, nor will there ever be a time when they are not ten. Therefore, I have said that the truth of number is incorruptible and common to all who think. — St. Augustine
I'm probably not understanding this whole thing, but wouldn't this poison pill, which would lower share price, also lead to a lower valuation of the company thus forcing Goldman to give a report favorable to Musk?
Yesterday he was talking about however many shareholders the law allows. Mentioned 2,000 and still could be privately held, IIRC.Demosthenes81 said:Maybe two or three silent allies who buy up to 14.9% and then replaces the board, removing the poison pill and then $$$FTAG 2000 said:
I can't wait to see Elon's plan B.
He's already wargamed this thing.
It does not kick in retroactively.aTm2004 said:Would this also kick in retroactively? Let's say Elon thought about this and made a huge buy earlier this week to take him beyond the 15%.will25u said:
Can someone explain in common terms? I read the link BMX posted, but am not 100% sure I know what it means.
If someone buys more than 15% of the total stock, this kicks in. But how does that affect the offer to buy 100% at $54.20?
And what options does this give/take away from the BOD or EM?
If anyone wants to read more.
https://www.investopedia.com/ask/answers/042015/why-shareholder-rights-plan-called-poison-pill.asp
It won't even have to go that far.Bockaneer said:
I'm probably not understanding this whole thing, but wouldn't this poison pill, which would lower share price, also lead to a lower valuation of the company thus forcing Goldman to give a report favorable to Musk?
Shareholders can file a lawsuit today (or Monday) over the board not accepting this, and also inserting the pill which will devalue the stock.
Sea Speed said:
These people are sick. So addicted to controlling the narrative and information that they would rather burn down the institutions than allow people to have the free flow of information.
Well said. Progressives are truly deranged.
CNN is an enemy of the state and should be treated as such.
The stock is already inflated with speculators trying to get paid off Elon's purchase. I assume this kills that value added plus lowers the low side of the value prior to the push by musk.
I just read analyst are already moving it to a sell rating. Could be ugly for vanguard.
I just read analyst are already moving it to a sell rating. Could be ugly for vanguard.
This is lingo that I can understand. All those FINRA certifications.aggiehawg said:Uhm? Been a long time since I was up to date on securities laws, but that white knight issue could be problematical.Quote:
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 Twitter's 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.
The Rights Plan will expire on April 14, 2023.
Anyone have a copy of the Rights Plan? Would give me a better idea on the details, which are all very important.
Twitter is issuing Shareholder Rights to current shareholders. A Shareholder Right is a type of option. The name is confusing, so I am just going to call them stock options, which is a better description of what they are.
Investopedia article here: https://www.investopedia.com/terms/r/rightsoffering.asp#:~:text=A%20rights%20issue%20is%20an,usually%2016%20to%2030%20days).
The Shareholder gets these options to buy TWTR at some specific strike price. They are issued kind of like a stock dividend. You get X options for each share you own.
So, as Shareholder, you can sell your shares, but keep the options. The catch is that these options are not granted until the moment a specific trigger occurs. In this case, that trigger is someone acquiring 15% of the company.
Once the trigger is hit, you get the options (unless you are Musk) and can exercise the options at a discount, whether you still own the shares that granted you those options or not.
In the case of a poison pill, these options are likely not transferrable, which means that Elon can't offer to buy them.
It makes for a very effective trap.
I don't think that would make for a successful lawsuit.
Quick google search:
Any lawsuit's viability is going to depend on what happens next.
Quick google search:
Quote:
Under Delaware law, board actions are typically subject to scrutiny under the business judgment rule. In the case of a dispute over a Delaware company's adoption of a poison pill, however, the decision of the board to adopt such a plan will be subject to the heightened standard of review set forth in the Delaware Supreme Court's 1985 decision Unocal Corp. v. Mesa Petroleum. Unocal requires that a board show the following to substantiate the use of a stockholder rights plan: (i) in adopting a stockholder rights plan, the board had reasonable grounds for concluding that a threat to the corporate enterprise existed; and (ii) any defensive measures taken were reasonable in relation to the threat posed.
Any lawsuit's viability is going to depend on what happens next.
In short, no one with options gets diluted and anyone without options gets diluted, correct? I imagine if the options are non-transferable the stock price will take a minor hit based upon the unlikely scenario that Elon actually purposely steps in the trap for the giggles. I don't see how it causes a major reduction of the stock other than the perception that Elon won't be buying Twitter or that the company is more concerned with control than profits.
Rights Offerings are often used for smaller, private companies that need another round of funding to get ready to IPO. They give their current shareholders an incentive to buy more shares at a discounted price before asking new investors for investment. They are a good tool if a company is in trouble, they need money, and want to sweeten the pot for their current investors. They are especially useful if you have one main investor that everyone watches before they continue to invest, and you are facing a potential, but risky, big swing in the medium term. As a company, you can negotiate the specifics of the rights offering that gets him / her to move, and then everyone else will follow suit, knowing that the company has enough capital to survive until the outcome of the big swing.
Thanks.
So, the stock will most likely tank on Monday. Could his plan B be having a few like minded friends with billions to burn lined up to each buy enough to give them 51%?
So, the stock will most likely tank on Monday. Could his plan B be having a few like minded friends with billions to burn lined up to each buy enough to give them 51%?
hph6203 said:
In short, no one with options gets diluted and anyone without options gets diluted, correct? I imagine if the options are non-transferable the stock price will take a minor hit based upon the unlikely scenario that Elon actually purposely steps in the trap for the giggles. I don't see how it causes a major reduction of the stock other than the perception that Elon won't be buying Twitter or that the company is more concerned with control than profits.
Minor hit? The stock price has risen 20% in the past two weeks with Elon disclosing his position, with people anticipating he'd buy more or buy the company. Musk's offer represents a 10% premium on where it closed yesterday.
There's going to be a drop and stockholders will be able to hold the Board accountable.
**** twitter. I hope Elon takes them down hard.
Yeah, lets just throw out some round numbers for an example. Again, most of this is speculation until I read the rights agreement, but this will give a better idea of what is going on.hph6203 said:
In short, no one with options gets diluted and anyone without options gets diluted, correct? I imagine if the options are non-transferable the stock price will take a minor hit based upon the unlikely scenario that Elon actually purposely steps in the trap for the giggles. I don't see how it causes a major reduction of the stock other than the perception that Elon won't be buying Twitter or that the company is more concerned with control than profits.
Say the offer is for $50, and there are 100 shares outstanding.
Elon buys 15 shares, and triggers the Rights Plan.
Now, the other 85 shares get granted options. Lets say that they have a strike price of $25, and each shareholder gets two of them.
If all 85 shareholders exercise their options, they pay $50 ($25/option x 2 options), and now they own 3 shares each. That is 85 * 3 + Elon's 15 = 270 shares outstanding.
Now, Elon has 15 / 270 ownership, or 5.5% ownership.
The price of the stock would drop to $25.01 or less for quite a while as people unloaded their options. If the price goes to $25.01, you have a penny arbitrage opportunity, which you take.
But, the hitch is, I have no idea how many options are granted under the rights plan. It could be pretty diabolical, like granting new rights to everyone but the trigger man every month.
That said, TWTR is playing chicken with a crazy ass billionaire. He might trigger it just to cause a panic. Even more likely, he could threaten to trigger it, and start acquiring right up until he hits 14.99% ownership. It's mutually assured destruction, not only for the board, but for every single owner of TWTR. The price immediately drops to the strike price of the options, and stays there.
It would be HILAREOUS if Musk kept the entire shareholder base in a constant state of panic by selling two or three hundred shares with one broker, and then buying 100 shares with another broker. Just nasty.
What does this mean?BMX Bandit said:
I don't think that would make for a successful lawsuit.
Quick google search:Quote:
Under Delaware law, board actions are typically subject to scrutiny under the business judgment rule. In the case of a dispute over a Delaware company's adoption of a poison pill, however, the decision of the board to adopt such a plan will be subject to the heightened standard of review set forth in the Delaware Supreme Court's 1985 decision Unocal Corp. v. Mesa Petroleum. Unocal requires that a board show the following to substantiate the use of a stockholder rights plan: (i) in adopting a stockholder rights plan, the board had reasonable grounds for concluding that a threat to the corporate enterprise existed; and (ii) any defensive measures taken were reasonable in relation to the threat posed.
Any lawsuit's viability is going to depend on what happens next.
What will Twitter say is the treat? That they couldn't moderate? That Musk would ruin the company?
What are reasonable grounds? These are all fact issues, no?
What are reasonable defensive measures?
Not asking for free legal research, but I am sure that there is case law around these. Wouldn't be surprised if there isn't a method or test in place for each.
First off, it has risen and now fallen back below 15% since he notified he bought the shares. Second of all, he is currently offering 20% above where the stock ended yesterday.FTAG 2000 said:hph6203 said:
In short, no one with options gets diluted and anyone without options gets diluted, correct? I imagine if the options are non-transferable the stock price will take a minor hit based upon the unlikely scenario that Elon actually purposely steps in the trap for the giggles. I don't see how it causes a major reduction of the stock other than the perception that Elon won't be buying Twitter or that the company is more concerned with control than profits.
Minor hit? The stock price has risen 20% in the past two weeks with Elon disclosing his position, with people anticipating he'd buy more or buy the company. Musk's offer represents a 10% premium on where it closed yesterday.
There's going to be a drop and stockholders will be able to hold the Board accountable.
45.08(current) / 39.31(before disclosing) = 114.67%
54.20(offer) / 45.08(current) = 120.23%
And he is offering 37.87% more value than before his stock buying was published.
54.20 / 39.31 = 137.87%
BuffsAg47 said:
Social media is cancer no matter who owns it.
Says the guy on a social media site...
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