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.
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
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.
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.