It would be a disservice to me, as an investor, if they sold the company at a value of $54/share knowing that it could easily be worth much more than that in the near future. As a shareholder, I hired this board specifically to make decisions with information that isn't public. I either trust them or I don't.
“False dichotomy”
[1] "The court reviewed and affirmed the following principals:"
"...Directors do not, by virtue of their office, owe fiduciary duties to shareholders. Circumstances may arise in which duties are owed but only by way of exception. To achieve this, there here must be something unusual in the nature of the relationship. Special circumstances which “replicate the salient features of well-established categories of fiduciary relationships” must be present."
"...The mere fact that a director has access to the company’s affairs, or that their actions have potential to impact shareholders, does not, of itself, amount to “special circumstances“, or give rise to a special relationship. These are “inevitable” features of the relationship between directors and shareholders..."
"...The purchase of shares from a shareholder is not (on its own) sufficient to create a fiduciary duty. Even in a situation where a director is purchasing shares from a shareholder, the existence of such a duty depends on the existence of special circumstances..."
[1] https://www.morrlaw.com/commercial-law/director-shareholder-...
That's exactly what it is. Stocks trade on an open market. Twitter went public. They chose to become a commodity. That's how commodities work.
Amazon stock price went nowhere for years, no profit, but investors stick with the company. Sometimes the investors are VC's, sometimes they are the bank of Mom and Dad, and sometimes they are the stock market.
But see, this point is irrelevant in this scenario. If they sell, every current shareholder gets bought out in full, they no longer have a stake in the company. He could shut it down the next day and it wouldn't affect the former shareholders, the company's future at that point is only Elon (and Twitter employees' and users') concern.
It's fiduciary duty to the shareholders, not the company itself, not the employees.
"Shareholders think they own the company — they are wrong":
https://www.ft.com/content/7bd1b20a-879b-11e5-90de-f44762bf9...
"Board of directors have a fiduciary duty to exercise due care in how they manage a corporation's affairs and also have the duty of loyalty and obedience to the corporation. A fiduciary duty means that both directors and officers handle their powers only for the collective benefit of the corporation AND (my emphasis) its stockholders."
They are. That's what a shareholder is.
You can have all 100% of the shares, and there are still things the law can punish you for, like running a company to the ground. You can't say: I owned 100% of the shares, so ordered the board to set fire to it as I though the flames would be beautiful and would give me a calming ego trip.
Shareholders can't order any type of action from directors, just because they might have votes to elect them.
Look at Facebook, and the CEO special shares. Do you think you are an owner of Facebook or a passenger along for the ride?
That's not a great example, because in Facebook's structure, Zuck has special class shares which give him 10x the voting power of regular shares, per share. So he actually does have the majority of the shareholder power, irrespective of any rationale of the responsibility of directors.
Or to give another variation on my argument. Let's assume that with his decisions on governance, he embarks on a road that provides for a steady stream of profits, on a new domain of guaranteed margin and high entry barrier for competitors.
A business model that will provide steady, slow, stable, but minimal grow. That will be good for the company on the long term, but not that good for shareholders returns. The lack of grow is unlikely to create a stock price increase.
The point here is that he does not own the company yet, and directors are the managers of the company and free to run it as they see fit.
Like a lot of HN posters, you seem to have zero understanding of the rules behind the rules and think what's actually found codified in law somewhere sitting on a shelf is how things actually work. It isn't.
If it was, Hunter Biden would be in jail, the last 4 or 5 American presidents should be impeached and in prison for war crimes, most of the high level executives at large banks would in jail after 2008.
Shareholders can absolutely order directors to act on their whim, or guess what happens at the next shareholder meeting? That board director gets fired.
I will post here some partial quotes and you can read the rest if you are interested.
"...Shareholders own the corporation, and the duty of the directors to maximise shareholder value follows from that. I have lost count of the number of times I have been told “that is the law”. But it is not the law. Certainly not in America, as Lynn Stout, a professor at Cornell University Law School, has pointed out..."
"...Shareholders in England have more rights — but even there, the obligation of a company director is to promote the success of the company for the benefit of the members. The company comes first, the benefit to the members follows from its success. And English shareholders are definitely not owners. The Court of Appeal declared in 1948 that “shareholders are not, in the eyes of the law, part owners of the company”. In 2003, the House of Lords reaffirmed that ruling, in unequivocal terms..."
"...Ownership is not a simple concept..."
"...But shares give their holders no right of possession and no right of use. If shareholders go to the company premises, they will more likely than not be turned away..."
"...Shareholders do not have the right to manage the company in which they hold an interest, and even their right to appoint the people who do is largely theoretical. They are entitled only to such part of the income as the directors declare as dividends, and have no right to the proceeds of the sale of corporate assets — except in the event of the liquidation of the entire company, in which case they will get what is left; not much, as a rule..."
Here is what would be looking after their fiduciary duties:
The company had a loss of 200 million dollars this year. Was only profitable 2 years out of its 16 years of existence. The board should state that Twitter in the hands of Elon Musk, could jeopardize its current unique and somewhat also precarious, place in social media.
The company should ask Elon Musk, to first explain to shareholders what he plans to do with the company, and how it would benefit them. Provide details on shape and form of how his plan would be implemented. Until then, rejecting the offer is looking after their fiduciary duties.