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Comment by maxclark | Hacker News Reader

Predictably stupid. They're going to come back and say the company is worth >$70B.

That's how the game is played. If you want to take over a company without the consent of its executives, it's going to be a fight and you're probably going to lose.

> ... consent of its executives...

*sigh*

The board of a public company cannot reasonably claim that they’re worth twice(!) what the market currently values their company at simply because they feel it’s true. Unless they have advertising contracts and growth metrics in the pipeline that represent a reasonable doubling of revenue and value, they’re acting legally irresponsibly. Justifying this is difficult. This is objectively a good offer.

The literal value is their share price x total shares.

The notional value is at best the NPV of future profit streams. However Twitter's track record on profits are dismal so the claim is dubious legally.

No, that’s only for shares trading at the moment. Otherwise buyouts would not have the premium they normally do.

Share prices go up as you buy a company because you buy from the people that value their shares least first.

You can’t just multiply the current price and expect everyone to be willing to sell for that amount.

What if someone is unwilling to sell? Or at an unreasonable price, say $100M/share?

Then you might not be able to afford to buy the company!

Apparently it's lower than the current 52 week moving average of the stock price, so I don't think it would be outrageous to claim it's a low offer even without some massive deals in the pipeline.

Somewhere between 50% to 100% is the standard premium in all such acquisitions. As it stands Musk is offering 17% extra. Of course that takes the existing bump that the stock got from his initial purchase into consideration, but investors already have the ability to cash out at the current price so that lessens the attractiveness of the offer.

No, they don't really have the ability to cash out at current price. Maybe the smalltime investor but if any large institution tried to cash out the share price will tank. Just like it will tank when Musk ends up selling his shares.

Twitter has the potential to be much higher than its current value. It’s currently at a zero-earnings pricing. I don’t know whether Agrawal will turn it around, but if Elon or somebody like him stepped in, maybe they could clean house and do it. If Twitter employees are freaking out right now, it’s because they have so many people doing stuff that isn’t bringing in money.

I think the board is right to reject the offer. Twitter could be worth more. Twitter in Elon’s control would be a more valuable company.

If I were a shareholder, I’d want them to reject 52.40. Maybe not 92.40. The ideal outcome would be if Elon gets 51% control and I got to remain a shareholder.

Well, Twitter is 16 years old with $5 billions in revenue. Their maximum was ~$70 per share and that was 1 or 2 times. I don't think 92.40 is even reasonable since you have incumbents ranging from IG to tiktok.

Heck, Tiktok could add a timeline just like twitter and decimate them since Gen Z and millenials (26 and younger) are basically there. Facebook is old school and will start slowing down going forward. IG is for business since the appeal (sharing photos with friends) has been lost. Snap has its niche and Gab, Gettir, etc... are catering to the right.

People like controversy and that's the main reason twitter is relevant. Left and Right like to expose each other. That's the main reason alt-tech is not mainstream.

Corporate governance needs a revamp. Executives have too much power relative to shareholders.

They will claim whatever they need to claim to justify not taking the deal. Like I said, it's how the game is played and completely standard practice. Lawsuits are also standard practice, which is why board members have insurance.

If Musk fails, are there likely to be any lasting effects to Twitter or more generally to the market?

Him liquidating his position could crash the stock.

Which is a big problem in having a fair economy.

What are the options for Elon Musk if he really wanted to counter this poison pill?

Have multiple entities buy shares

I wonder if these could be Tesla, The Boring Company, and SpaceX?

The poison pill will apply to "groups" as well, so don't think that would work

Is this legal?

He could use the infamous antidote clause.

I think that clause has to be administered within a few hours and that time has already passed. It may be necessary to amputate a portion of the company.

Pay a lot of money.

Sell all of his stock, and call out the execs publicly.

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