If Twitter was worth more, it'd be worth more.
With that logic, you should put a huge chunk of your savings into Twitter to benefit from the insight, as it's currently trading at 39% below its 52-week high.
I have not bought TWTR.
As legitimate as it is to believe that the stock price will never again reach $54.
Then it should be priced for discounted future cash flow and value.
The stock price today represents what investors think the future value might be. The speculation that the dip will bounce back is built into today's price.
The reduced price over the high represents the perceived risk that it won't return.
Musk values the stock higher than the mean investor.
If you bought a $100k home which then dipped to $80k during Covid, would you accept an unsolicited bid of $90k?
It's reasonable for some people to take the bid, since you could arguably buy another comparable house for $80k and pocket the $10k difference, but I think a lot of other people would reasonably choose not to.
(I'm not totally sure if this logic scales to board rooms / billions of dollars, but curious to hear thoughts.)
I own several stocks that have dropped in the last few months. If someone offered me a 20% premium to sell them today, I would do so in a heartbeat. I would even do so if it meant the company would go private and I couldn't buy that stock again.
In that case I would be terrified as a board member, I've basically lost about $15bn of shareholder value for my shareholders.
So why not take the offer (which is 20% higher than the current market price for the stock) and put the received cashed into other tech stocks? Is Twitter uniquely/excessively down compared to other tech stocks, and due for a bigger rebound?
At that point, they'll need a good lawyer to explain why Twitter chose to omit that information from their SEC filings.
The only way this makes sense is if there is a bigger offer incoming OR if the Twitter board has a plan to make twitter much more successful in the near term and succeeds at that plan.
Taxation is only a concern for folks who have big unrealized gains and lack harvestable unrealized losses.
> We are in a downturn affecting the entire tech industry Some companies are down more than others, and some are doing fine. Twitter revenue is largely driven by ads and they are likely also going to be hit by Apple's privacy changes like all other ad based businesses. Meta (Facebook) has already said they expect ~$10 billion revenue hit from the changes. It's feasible to think that Twitter revenue for the year may actually drop and the stock price may not recover to the 2021 levels any time soon.
Again, you might be right that Twitter's price was over-inflated in 2021, but "it was worth more" is certainly a non-cultural/political reason to push back on the offer - even if they're wrong about Twitter's long-term value.
That's cute but the past is gone. Twitter is clearly going downhill, both with their product and with their management (good thing they got rid of Dorsey, but perhaps that was too little too late), the stock just follows on that. If anything, people like Musk are the ones who still attract interest to the platform.
>Twitter can bring more value to shareholders with or without Elon
Twitter is on a very dangerous spot right now, their MAUs peaked long ago as young people go to other platforms, and overall, everyone is a bit of tired of the kind of discourse that predominates there, for instance, Trump was banned and I STILL find out everything about him because the people there (left and right-wing) are absolutely obsessed with him.
Honestly, Twitter is the one social media platform that I wouldn't really mind if it just disappeared. At least Facebook has some family members in there and some pictures from my earlier years. Twitter brings nothing of value to my life and I'm sure I'm not the only one who feels like that.
Trump is mainstream. MSM covers him, as do Reddit and Facebook posters.
This bear market is returning to reality and paying the price for those profits.
Wow, that's great news for Velodyne Lidar -- currently trading around $2 and was $28 less than 2 years ago. (Why bother with paltry 2x return on Twitter when you could get a 14x return?)
> problem with Musk’s offer is that it is pretty low. Musk points out that $54.20 “represents a 54% premium” over where he started investing in Twitter, and a 38% premium over where the stock was before he announced his position. But Twitter was in the $60s in October, and a lot of its big long-term holders seem unlikely to be sellers at $54.20. “‘No board in America is going to take that number,’ said Jefferies analyst Brent Thill.”
Against the bid coming from him:
- He famously pretended he was going to take Tesla private and got in trouble because he was pretending. Takeover offers usually don’t have that history I guess.
- He doesn’t have financing, not even pretend financing like when he said he was going to take Tesla private
As an outsider, I'm personally intrigued by the prospect. There are two things he's mentioned that I think could be very beneficial (outside of freedom of expression) to society:
1. Transparency - open sourced algorithms for what shows when and transparency about moderation decisions
2. Reduced short-term financial incentives - Given it'd be bank-rolled by someone with a lot of money and private, they wouldn't need to play the gray area game of increasing advertising & data sharing that other sites do.
The issue is that managerial class of America, both in private and public sector, are in bed with each other. The government cannot suppress free speech using the frontdoor, but these social media companies (Meta, Twitter) as well as Big Tech machinery (Google, Apple, Microsoft, Amazon) act as a proxy for supressing political speech through opaque algorithms and straight up censorship.
We, liberals, used to be exceptionally devoted to free speech. Just look up ACLU's cases from the 90's and prior. We were against the establishment. Against the managerial class crushing labor. Against the fucking 3 letter agencies.
Now, my own party wants to turn America into an authoritarian censorship dystopia. It's hard to stand by that.
You could start by lobbying to force tech companies over a certain size to disclose reasons for users or content being removed from the platform. The legislation would have to have teeth, naturally.
Btw, I've never seen my comment go from 6 votes to 0 in a matter of 30 mins. Insane.
Sad truth is, the moment an advocacy group and a political party become too close, the advocacy group ceases to be effective. This has nothing to do with Democrats in particular; cozying up to the Republicans is no different (e.g. the NRA).
I'm heartened by the emergence of organisations like FIRE that are picking up the baton for free speech in some of the contexts where the ACLU has completely dropped the ball, but still feel a pang of sadness at the hollowing out of the old, bad-ass ACLU.
> FIRE
What's going to be its immunity against the pests that took over ACLU/NRA?
The same happens with the other team.
It's disappointing but predictable.
Power. One side wants to have a safe garden where all their thoughts are heard with the other side silenced.