Second, could Elon swoop in at that point?
Edit: Also, if Elon is reading this, I'll happily buy 14.9% of twitter, and vote as part of your block. Just pay me enough to cover the sale and taxes, plus 1%.
You might want to speak with a lawyer who is familiar with inchoate crime.
What you publicly proposed to Elon is a crime, since you intend to conceal beneficial ownership of shares.
Promising voting rights doesn't change beneficial ownership. Twitter would have precedent, however, to find "conscious parallelism" and thus "a de facto control bloc" between the commenter and Musk, and thus bundle them for purposes of the poison pill's activation [1].
Still, not a crime. Civil dispute under corporate law.
[1] https://www.yalelawjournal.org/comment/unpacking-wolf-packs
The Yale Law article you cite is just about groups of investors working together, which is within their rights.
It's not a crime to publicly finance someone else's stock purchases, or even to publicly solicit others to finance your stock purchases (it's not "solicitation" in the inchoate sense, since the inducement is not towards a crime).
Not really.
Setting aside the other issues, first and foremost this is obviously a joke. Prosecution would have to establish mens rea for this to rise to a criminal act. Do you think anyone could prove true intent for these events to unfold, based on this comment?
If you admit that he is the beneficial owner and you are just an intermediary, then the poison pill provision is not skirted.
Oh so Mr. Musk incidentally wired you billions of dollars before the share purchase?
(Assembly into blocs of financing, dpeech as the action of capital allocation)
Honestly I'd lose faith in the U.S. in it's entirety if it was the case that the answer to your question was even remotely "yes".
Keep in mind, I lump in people's behavior with normative restrictions of the First Amendment. If the Government can't do it, and the Government is us, we shouldn't be doing it. So businesses doing it because business doesn't hold for me either. Especially if it happens as a method of indirection to work around literal interpretation.
So if there is a restriction on shareholder coordination, I don't see how our legal system in this case can be taken seriously as anything but a tool utilized by those in positions of influence capable of more tightly coupling to other people of influence.
Saying “the government is the people” is much like saying “the shareholders are the managers of the company”: yes, that’s true in an oblique, ideal sense, but you’re going to run into trouble if you start trying to literally substitute the one for the other in random sentences.
The fund needs to report their holdings. Not all companies have a poison pill provision. Not all companies that do have a poison pill will activate it. In the case of an ETF there's usually a discussion between the portfolio manager and the company. They know where they stand. Plus it's not really in a passive fund mandate to go activist.
Seriously, do you think funds playing with the kind of money to buy 15% of twitter often make careless purchases?
>Edit: Also, if Elon is reading this, I'll happily buy 14.9% of twitter, and vote as part of your block. Just pay me enough to cover the sale and taxes, plus 1%.
Such an arrangement would make Elon the beneficial owner of your shares.
https://www.bloomberg.com/opinion/articles/2022-03-28/barcla...
$15bn is tiny, presumably we’re talking about big ETFs like SPY here.
And anyway, you’re pretty much agreeing with me. It’s absolutely possible for a big fund to make a huge and hilariously stupid mistake, but this twitter poison pill does not meaningfully affect the chances of that happening.
In a world where you can shoot yourself in the foot in a million ways, it is utterly pointless to speculate about this one extraordinarily unlikely situation.
I think we're in agreement that this Twitter thing isn't worth the attention, but we are far from agreeing that large financial institutions are inherently competent because they're large.
There's a race condition between the poison pill being instated and the ETF updating their strategy. I wonder if a board could maliciously take advantage of that somehow.
I don’t see anyone making that argument.
Speculating on an ETF “accidentally” acquiring more than 15% of Twitter implies a whole different level of incompetence than a big ETF ever fucking up big.
- You
Thanks for explaining why that won't work.
Presumably, if Elon has a few rich friends, they could use their own money, vote as a block, and the board would still be screwed.
I wonder what other schemes would work. B corp, maybe?
But that’s just playing along with the spirit of the rules, not a loophole.
No, but an ETF has a defined investment strategy, and if enough money comes into the ETF, it could potentially trigger this.
ETFs are a different concept, but a good index fund will be structured as an ETF, and it looks like this thread is using "ETF" to mean "index fund"? If so, then the answer to your question is an unambiguous yes.
The stated investment goal isn't "buy the S&P", it's "match the price of the S&P".
Such an agreement would be reached incredibly quickly, there would be no need for stopgap measures.
From the article:
> Under the new structure, if any person or group acquires beneficial ownership of at least 15% of Twitter’s outstanding common stock without the board’s approval
For example in the case of SPY, that would go against their stated investment objective.
They also clearly state
> the Trust may fail to own certain Index Securities at any particular time, the Trust generally will be substantially invested in Index Securities
The poison pill just requires prior approval from the board, which they would happily grant in this kind of a case.