quote:

Originally posted by Lefty Sig:
They are trying to stop Elon from getting a controlling interest.

I don't know about that. I think you and Hildur both have points, and Vanguard 'could' be moving in either direction. However, there is the issue that Vanguard has to answer to their investors and tanking the Musk deal will cost their investors huge $$$ (especially if Musk were to dump his shares), which could be a breach of Vanguard's fiduciary responsibility to them and open Vanguard to potential litigation. Stay tuned, this is about to get interesting...

Twitter Board Adopts "Poison Pill" To Thwart Musk Takeover, Exposing Itself To "Titanic" Legal Liability

As was widely expected and reported in the aftermath of Elon Musk going hostile on Friday morning, on Saturday morning Twitter adopted a measure that will shield it from hostile acquisition bids in a desperate step to prevent billionaire Elon Musk’s offer to take the company private and make it a bastion of free speech.

The board set up a shareholder rights plan, also known as a "poison pill" which as we clarified yesterday for the benefit of the company's overly dramatic, overly literal and overly snowflake employees, is not literal...

Uhm, someone should probably advise employees "poison pill" is not literal...

— zerohedge (@zerohedge) April 14, 2022
... and which is exercisable if a party - read Elon Musk - acquires 15% of the stock without prior approval, lasting for one year (if the pill had expired the day after the midterms it may have been a bit too obvious). The plan seeks to ensure that anyone taking control of Twitter through open market accumulation pays all shareholders an appropriate control premium, according to a statement Friday.

For a company that has struggled greatly with value creation - on Friday TWTR stock closed at $45.08, or 18 cents higher than where it closed on its first day as a public company, or $44.90 - a poison pill defense strategy allows existing shareholders the right to purchase additional shares at a discount, effectively diluting the ownership interest of the hostile party. Poison pills are common among companies under fire from activist investors or in hostile takeover situations.

Under Twitter’s plan, each right will entitle its holder 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.

Twitter enacted the plan to buy time, Bloomberg reported citing a person familiar with the matter, although it wasn't clear time for what: at $54.20, Musk's offer represents a premium to the historical TWTR price since IPO on 92% of the time.

And since the Twitter board is about to get bombarded with a barrage of lawsuits claiming it violated its fiduciary duty, the board also said it wants to be able to analyze and negotiate any deal, and may still accept it (spoiler alert: it won't).

Twitter’s board met Thursday to review Musk’s proposal - which according to the world's richest man was his “best and final” offer and who had already accrued a stake of more than 9% in Twitter since earlier this year - to determine if it was in the best interest of the company and all of its shareholders.

Included in Musk’s securities filing disclosing the bid Thursday morning was a script of text he sent to the company. In it he said, “it’s a high price and your shareholders will love it.” Hilariously, one prominent - and former - investor said the offer was too low and the market reaction appeared to agree. Saudi Arabia’s Prince Alwaleed bin Talal said the deal doesn’t “come close to the intrinsic value” of the popular social media platform. Which is, well, hilarious since as we showed yesterday, it appears the Prince no longer has direct ownership of even one share of Twitter stock.

Speaking later Thursday at a TED conference, Musk said he wasn’t sure he “will actually be able to acquire it.” He added that his intent was to also retain “as many shareholders as is allowed by the law,” rather than keeping sole ownership of the company himself.

After initially surging, Twitter shares dropped 1.7% in New York on Thursday, reflecting the market’s view that the deal is likely to be rejected or to fall through.

Musk first disclosed his Twitter stake on April 4, making him the largest individual investor. At the TED conference, he indicated that he has a Plan B if Twitter’s board rejects his offer. He declined to elaborate. But in his filing earlier in the day, he said he would rethink his investment if the bid failed.

“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.

* * *

Previewing the poison pilll defense, on Thursday, Cameron Winklevoss, founder of the Gemini cryptocurrency exchange, tweeted (of course) that “Twitter is considering a poison pill to thwart @elonmusk’s offer." In response, Musk said that a “poison pill” move would be a "breach" of the board's fiduciary duty and could expose Twitter’s board to “titanic” legal liability.

Winklevoss alleged in his tweet that, by adopting the poison pill tactic, Twitter was demonstrating its commitment to preserving the status quo even if it has a negative impact on existing shareholders.

“They would rather self-immolate than give up their censorship programs. This shows you how deeply committed they are to Orwellian control of the narratives and global discourse. Scary,” he wrote. Twitter has repeatedly suppressed and "shadowbanned" conservative viewpoints, allegations the company has repeatedly denied.

Adam Candeub, a law professor at Michigan State University, said that Twitter’s board could face legal consequences if they turn down an offer that’s financially lucrative to shareholders.

“Twitter’s owned by shareholders, and the directors have to act in a way that’s in their best interests, not in the way that allows them to keep control of the corporation,” Candeub told The Epoch Times.

“If they turn down a very favorable price, there will be dereliction of their legal duty, and there could be lots of legal consequences.”

* * *

Now that his original plan has been thwarted, Musk has said that he has a "Plan B" in stock for the company although he did not disclose what it is. As Mark Cuban pointed out yesterday one possible response is for Elon to be joined by one or more like-minded, anti-censorship investors such as Peter Thiel who either build up stakes through the poison pill limit in the process making a management and board replacement by proxy vote the simple outcome, or they just raise the takeover price to a level that even the woke Twitter board can not reject.

Or skip the whale investor approach entirely, and open up twitter to a mass investor buyout, in the form of a DAO, where "token holders will get to vote on what's trending and who gets verified."


Alternatively, Musk can take his appeal directly to his 82 million twitter followers (a quarter of Twitter's total 217 million global Daily Active Users) and have them all buy several shares, then pledge them for Elon during the next proxy vote. Because as much as Twitter wants to reject any buyout offer that will prevent it from imposing the censorship its liberal board and employees love so much, there is only so much it can do.

In the end, however, the only question is how dedicated is Musk to control Twitter, because if he really wants it, he will get it.

https://www.zerohedge.com/mark...itself-titanic-legal

I believe the man is pretty Flippin dedicated…


He has already stated his views on how the SEC forced him to take a compromised penalty re: Tesla.

Out and out called them “bastards!”

FDIC definitely does more harm than good. Like nearly every federal department in existence, they are used as a militant arm of the liberals by unelected activist federal employees.

We need a purge of our government. The liberty tree needs watering.

love it.

quote:

Originally posted by Balzé Halzé:
In the end, however, the only question is how dedicated is Musk to control Twitter, because if he really wants it, he will get it.

My nephew, in his late 20s,is a big "fan" of Musk, been following him for years, read all the books on him. He says one of Musk's traits is that the guy usually gets what he wants, a very driven man.

Vanguard may have increased its stake to cash out on Musk's buyout offer. That would be a few billion profit in a short amount of time, and good for Vanguard's investors.

But the ties to the WEF and wokeness with respect to forcing companies to report on their "diversity" and demanding they increase diversity is getting close to Blackrock forcing companies to go "green" and de-carbonize.

It's all to further the globalist "great reset" that will give elites control of the economy and eliminate competitors that might push them off the top of the hill.

Free markets are the most efficient, and relentless allocator of capital. Elites want to control the allocation of capital to benefit themselves. It's just a power grab pure and simple.

Can't Musk just continuing buying at $XX.XX whatever?

quote:

Vanguard may have increased its stake to cash out on Musk's buyout offer. That would be a few billion profit in a short amount of time, and good for Vanguard's investors.

Assuming something else (like the company's actual performance) doesn't drive the price down (even temporarily) long enough to create a buying opportunity.

quote:

Originally posted by Il Cattivo:
Assuming something else (like the company's actual performance) doesn't drive the price down (even temporarily) long enough to create a buying opportunity.

Like the possibility of Musk losing interest and dumping all his shares?

Before someone posts this video (I am seeing it all over Twitter being linked to a conversation about Musk)… it is actually an MSNBC conversation about Trump from a few years ago.

At the end of the day though, to paraphrase her, “he’s trying to control the narrative and how people think…that’s our job”


https://twitter.com/stoolpresi...ahXuK4fu_Nvlh2tnbkkw

quote:

Alternatively, Musk can take his appeal directly to his 82 million twitter followers (a quarter of Twitter's total 217 million global Daily Active Users) and have them all buy several shares, then pledge them for Elon during the next proxy vote. Because as much as Twitter wants to reject any buyout offer that will prevent it from imposing the censorship its liberal board and employees love so much, there is only so much it can do.

This is a very real possibility. The people who follow Musk on Twitter are hard core believers in the man and would likely do whatever he asked of them. This is definitely one way to side step the 'poison pill' stupidity.

quote:

Originally posted by Lefty Sig:
Vanguard may have increased its stake to cash out on Musk's buyout offer. That would be a few billion profit in a short amount of time, and good for Vanguard's investors.

I think is this spot on. Lots of money made very quickly for their investors makes them a hero (and very rich). Anybody stop and think for a moment that maybe Musk might be in contact with the top of the management chain at Vanguard? If they agreed to have their investors pledge their voting poxy to Musk, its game over for the garbage that currently runs Tweeter. And that completely renders the 'poison pill' an exercise in futility.

For those asking how motivated Musk might be, I think its obvious you don't accumulate $256B in wealth by simply accepting no for an answer. Stay tuned, this is far from over.

Hell I’d happily buy a lot of shares and give the proxy to Elon. It’s a no brainer.

SIGnified, I would jump on that train as well.
A massive number of people buying even a few shares each would counter the poison pill problem.

Monday should be pretty interesting.

I grew up during Sputnik and Gemini. Elon has taken the space program beyond what I could ever imagine ... leaving both Bezos and Branson as amateurs in the dust.

That being said, I too would like to see Elon carry forward with the buying out of Twitter.

Signified ... Monday will be pretty interesting indeed.

Does the government have an interest in Twitter?

Twitter Responds to Elon Musk Proposal by Creating Poison Pill

The social media and communication platform Twitter, responded to the bid by billionaire entrepreneur Elon Musk by announcing Friday the Twitter board of directors has unanimously adopted a “poison pill” defense in response to Tesla CEO Elon Musk’s proposal to buy the company and take it private. [LINK to Press Release]

Twitter said the move, formally called a “limited duration shareholder rights plan,” aims to enable its investors to “realize the full value of their investment” by reducing the likelihood that any one person can gain control of the company without either paying shareholders a premium or giving the board more time. Poison pills are often used to defend against hostile takeovers.

According to Twitter’s plan, if Musk or any other person or group acquires at least 15 percent of Twitter’s stock, the poison pill will trigger.

At that point, every other shareholder, aside from Musk, would be allowed to purchase new shares of Twitter at half the going market price, which stood at $45.08 at the closing bell on Thursday.

The flood of half-price shares would effectively dilute Musk’s ownership stake, making it massively more expensive for him to build up a controlling position. Twitter said its board had voted unanimously in favor of the plan, which will remain in effect until April 14, 2023.

Obviously, the people in control of Twitter really do not want to lose control over the platform. Elon Musk’s offer to purchase Twitter at $54.20 per share, represents a value of 38% more than his first shares purchased. The public shareholders would make a sizeable return on their investment. However, the fiduciary responsibility of a board of directors to its shareholders is really not what this is about.

In the big picture, Twitter is a bottomless pit of financial cost. Once you understand the technology behind Twitter, it is easy to understand why the public speech platform is not a viable business model, and it never was.

Twitter is exclusively a ‘user engagement‘ social media platform with no hosted content. Twitter is massively expensive to operate because the costs of operating the technology, all of which are driven by the substantive issue of ‘simultaneous users‘, exceeds the capacity of the platform to generate revenue.

Almost all other internet websites and social media have two structures: (A) Content, and (B) User Engagement.

Content represents a small part of any internet hosting expense for a platform and represents almost 100% of the platform’s ability to generate money. User engagement on the other hand, costs massive amounts of money – due to the need for data processing to handle the engagement and simultaneous users – and provides almost no revenue.

Many news and information content providers do not even host a user engagement commenting system any longer. User engagement is just too expensive and requires monitoring, moderation and massive amounts of data processing space on the platform servers.

Twitter’s operating model only consists of ‘user engagement.’

The platform itself is a massive global commenting system – the ‘public square’ discussion.

♦CONTENT is the material that can be monetized easily. Content is the article, graphic, podcast, or video you would see and watch. Content is profitable based on advertising. Eyeballs on content means eyeballs on internet advertising. This is how websites and content providers are able to pay for expenses and operate as a business model for the continuation of content. Hosting costs for content, even on a massive scale of viewership/readership are low, and the income from advertising increases with more readers and viewers. This is the traditional business model of content providers.

♦USER ENGAGEMENT is the part that is not as easily monetized, and user engagement drives a higher cost. User engagement is the comments, likes, dislikes and discussion that takes place based on the users who view the content material and discuss. More user engagement, particularly more simultaneous users, costs more money for the platform, because the random capability of the audience to interact with the server network creates exponentially more data processing demand. Data processing, not capacity, drives the cost.

Server capacity is a relatively easy issue to solve for content providers. In order to see the content, the host needs to ensure they have enough capacity for the audience to arrive and view, read, or watch the content without overwhelming the server network. Server processing speed and data performance are a part of the construct to ensure everything is smooth.

Server capacity is not the challenge for ‘user engagement.’ Processing trillions of simultaneous user-activated functions is the tech challenge for ‘user engagement.’ It’s not the capacity, it’s the data processing. As a result, it is far more expensive to operate social media than it is to operate a simple website construct, because user engagement is the entire premise behind social media.

Facebook and Instagram have a more viable business model because users provide the content they host. Content can be monetized, and in the case of Facebook, Google, Instagram and YouTube they can also monetize the user that provides it. Twitter does not host content at all.

Facebook makes money by selling advertising like a traditional website. Facebook and Google have also specialized in the micro-targeting of advertising to very specific tailored advertising audiences. Advertising agencies pay a premium for the micro-targeting of a specific audience.

Facebook also makes money by selling data on users. You may remember the reference of Cambridge Analytica purchasing micro-targeting user information from Facebook for use in elections and voter targeting efforts. More recently, Facebook has cut out the middlemen and started micro-targeting for politics and getting paid directly by political campaigns for their efforts.

In almost all social media, the user is providing the content that the platform can monetize. In the Facebook example above, the platform can offset the extreme increases in user engagement costs (data processing) by making money from the hosted content, and from selling the data of the user (there are many purchasers).

However, for Twitter the business model problem is: (a) the absence of content to monetize, and (b) the extreme costs of user engagement that dwarf the “simultaneous user” data processing costs for Facebook.

As Facebook grows, they can grow their revenue. As Twitter grows, it increases their expenses massively and only moderately increases their revenue.

Twitter is not making a decision to decline the generous offer by Elon Musk because of stewardship or fiduciary responsibility to shareholders. The financials of Twitter as a non-viable business model highlight the issue of money being irrelevant. Twitter does not and cannot make money. Growing Twitter only means growing an expense. Growing Twitter does not grow revenue enough to offset the increase in expense.

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.

.

https://theconservativetreehou...reating-poison-pill/