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Comment by mimikatz | Hacker News Reader

This seems to be a clear case of management working against shareholders. Twitter stock has gone nowhere since IPO 10 years ago. 10 years of no dividends and no appreciation in value. Elon is offering a decent premium on the current price and its pretty obvious if he walks away it will return to the old price. Who does a poison pill help and protect? Current management who have attached themselves to a company, this doesn't help the people invested in the company or the people with stock ownership. All these comments are outside if it would be good or bad if Elon owned it, that shouldn't be an investors concern.

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That's assuming it's a real offer. There is a very high chance that even if the board accepted the offer Elon would back out, which would be a mess that would harm the company. It's clear that trolling is a big part of this (I would say the entire purpose). He doesn't even have funding lined up and doesn't have a real plan for how to run the company beyond vague aspirational statements.

> Elon would back out.... He doesn't even have funding lined up

Can one just walk up to SEC and file an offer to buy out a company all-cash without showing some evidence of how they plan to arrange the money? Isn't there an entry barrier? Also, shouldn't there be a clause to penalise backing out? If not then one could toy around with the share prices as you say, no?

That's not how this sort of thing works. Musk can't back out of this without paying a tremendous sum to the current shareholders. This isn't like a private company acquisition where there is an extended due diligence where anything can come up. He has very few options to cancel the purchase if it is accepted.

You are incorrect. He made a non-binding offer contingent on a number of different conditions, such as obtaining financing, and with the ability to withdraw or modify it at any time, for any reason.

Here is the filing: https://www.sec.gov/Archives/edgar/data/1418091/000110465922...

that is standard boilerplate for these contracts, as I understand it.

Why do you think any sane legal team would greenlight crafting a legal agreement to purchase a corporation for tens of billions without protective clauses?

The conditions under which the sale can fail to go through are enumerated in the document, and all of them are pretty much boilerplate. Practically speaking, Musk cannot back out unless there is a REALLY good reason that isn't enumerated in the offer. Here is the boilerplate:

1. Government approvals - self-explanatory.

2. "Confirmatory due diligence - making sure that Twitter isn't cooking the books or breaking the law (in an undisclosed way - if they have already told you they were breaking the law, that would not qualify).

3. The negotiation and execution of definitive agreements - writing the exact contract terms.

4. Completion of anticipated financing - I am assuming that some amount of the purchase is in the form of a leveraged buyout. This is about the due diligence of the lender, which is similarly restricted.

As LVMH discovered recently in their purchase of Tiffany, it would literally take an event bigger than the pandemic to otherwise get out of a purchase of a public company.

> The Proposal is non-binding and, once structured and agreed upon, would be conditioned upon [...]

> There can be no assurance that a definitive agreement with respect to the Proposal will be executed or, if executed, whether the transaction will be consummated... The Reporting Person reserves the right to withdraw the Proposal or modify the terms at any time including with respect to the amount or form of consideration.

I think you're mistaking it for a deal that's much further along than it is, there is no binding agreement where Mr. Musk would have to pay penalties or anything like that for dropping the deal. An agreement reached as a result of this proposal would be, but that seems unlikely right now.

Which makes it clear why this was such a lowball offer. IMO he never entertained the notion that his offer would be accepted. It was all a troll. 54.20 indeed.

To be fair, Jack finally stepped down in November and Parag replaced him as CEO. So there is new management that hasn’t really had time to shine or fail yet.

You act like Elon is interested in anything but a pump and dump here. He offered $54.20 per share in an attempt to pump it to its previous high so he could exit. Fortunately, the market knew he was full of shit. He has done this before, most notably with various cryptocurrencies.

I don't see how Elon Musk being at the helm would improve stock price long term. Yes, making Twitter into a libertarian wasteland would lead to a lot of user growth short term -- the Parler people might come back, along with the bot accounts -- but in turn I predict this would lead to plummeting ad revenue and massive disengagement of its existing (very active, dedicated, passionate) user base, as well as a huge amount of noise that just makes its moderation/NLP infrastructure even worse at filtering harmful content. Maybe I'm wrong/missing something though.

Elon Musk is offering to buy and own Twitter personally. There would be no Twitter stock if the transaction went through, unless he decides to issue some new stock, or IPo the company again at some point in the future.

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