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Comment by endisneigh | Hacker News Reader

It’s interesting to contextualize this with a regular persons life. This amount will present about 1/7 of his net worth.

However unlike a traditional purchase this will be n investment and depending on how it goes, he can get even more money.

If an average person had a max net worth of 3 million this would be like them deciding to buy a 400K investment property, or a laundry mat.

That aside, this is also a great example of how easy it is to become richer if you’re rich.

Musk buys at $39 pumps all month to $54. He can either sell and easily make billions profit or take over the entire company at what can only be described as a discount compared to potential.

Not to mention twitters stock hardly does well. He can just try again on the next dip if he likes.

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> Musk buys at $39 pumps all month to $54. He can either sell and easily make billions profit or take over the entire company at what can only be described as a discount compared to potential.

He can’t sell his whole stake for a profit. There’s nowhere near enough liquidity. The moment he tries to sell billions of dollars of stock it’d tank.

He'll have to do it the same way he bought his current stake: slowly, over weeks and months, a little bit every day. A totally standard thing to ask your investment bank to do.

He bought 4.6% of Twitter in the two weeks he went from 5% to 9.6% when he filed. That's not super slow.

He owns about 70 million shares. Before he announced his stake, the stock had a daily trading volume of about 20 million. I agree it's not super slow, but also not super fast. Probably a reasonable speed given the volume.

How would the price tank if he holds all the shares?

because the price itself only indicaes that there is someone wantin to buy shares at that price - it doesnt indicate the number of shares that would go would he accept that price.

Isn't the premise that he's selling them?

The post you're responding to is talking about Tesla shares, not Twitter shares.

He can't sell after a move like this, it would be illegal. He's announcing his plans to not just hold but also to control the company, specifically to unlock value - means making some top level choices that makes Twitter stock move valuable. Had he dumped immediately after purchase he'd be prosecuted for market manipulation (realities of liquidity notwithstanding).

Musk is not obligated to hold his shares indefinitely. Yes he can’t sell, say, tomorrow. But he can sell in the future.

Yes, the exact timing is up to the circumstances. But selling a significant amount within the next month would almost certainly be considered an obvious manipulation attempt

When has this stopped him? He already violated securities laws several times and merely got slapped in the wrist for it.

Wouldn't be first time of him doing some blatantly against rules... Remember the tweets of taking Tesla private...

> The moment he tries to sell billions of dollars of stock it’d tank.

Hence the implied threat of doing so if they don't agree to his terms.

That's not quite how it works if you make a formal takeover offer. It's basically telling existing shareholders that he'll buy their stock at $54. If enough of them don't want to sell (depending on how it's structured), the deal falls through. It's a one-off purchase at $54 if it does go through. He can't buy more stock in the interim (I think).

Yes, but if they do not agree the price will:

1. Go to above $54, in which case musk profits and he can try again later (headwinds are strong in tech generally right now)

2. Go between $39 and $54 in which musk profits

3. Drop under $39 in which musk can further solidify his stake, for much cheaper than his takeover offer.

There’s basically no scenario in which musk loses assuming he’s serious and is willing to play the long game. Musk will either make a lot of money, or own Twitter.

> Musk will either make a lot of money, or own Twitter.

I mean maybe he still acquires Twitter but that could be in 20 years after it's been run into the ground.

I don’t see why he couldn’t buy more stock at the current selling price? As long as someone is willing to sell anyway.

This takeover is aimed at people that wouldn’t ordinarily sell their stock at this point in time.

IIRC the regulations are such that if you make a takeover offer, you can't do that? Not sure though, my work is only M&A-adjacent, so I'm not an expert.

I think this is an offer to the board, proposing that it compel all shareholders to sell at $54/share. The board can decide on the proposal without consulting the shareholders.

In practice the board will do what management thinks best. The various directors probably have legal duties as fiduciaries and will want to act in a manner such that they can demonstrate they performed those duties in good faith, but they will have enormous latitude so long as they observe certain forms.

There are likely procedures by which someone can force a shareholder vote on a proposal, but Musk isn't using them here. These are probably structured by the company bylaws.

> compel all shareholders to sell at $54/share

The board doesn't have that power. If a majority of shareholders do not want to sell, they'll just replace the board if it tried such a thing.

In this case, the top 10 shareholders are almost 50% of the shareholders all by themselves, so this really comes down to what they decide to do.

It's not an obvious good idea to buy Twitter though - and is especially risky if you're not wanting to just continue to run the business as is without potentially de-stabilizing it and destroying it in the process.

Ah yes, the average multimillionaire.

400k is an insane amount for a laundry mat

not with building.

Here's one for $450, saw another for $375: https://www.bizbuysell.com/Business-Opportunity/self-serve-l... - and they don't even own the building.

Machines alone are $1-3k each depending on how old and repaired they are.

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