Given that it’s at a share price premium for 90%+ of the lifetime of the stock since IPO, yes. Most shares were bought below the price Musk is asking.

Today's price and the 'expected' future price is all that matters. The 90% lifetime price history is not relevant. All transactions of this nature are based on future value. The offer is only an 18% premium at a time when many tech stocks are being hammered due to extrinsic reasons. It is not a serious offer.

I take it you're highly invested in Twitter stock given how confident you are it's going to go up by more than 20%?

Today's price is the expected future price. If you disagree, go buy the stock and make some money.

It closed $.18 above initial offer price in 2013.

The share price tells you nothing by itself—you also need to know the amount of shares outstanding at both points in time to make an actual comparison.

That is irrelevant. To show a breach of fiduciary duty with this kind of argument, you would basically have to prove that it is objectively impossible for Twitter stock to be worth more than what Musk offered over some horizon. I very much doubt there has ever been a successful case taking this approach.

If you think the stock could grow further without Musk then the board would be protecting your interests.

The board has declared the price offered to be too low. You say it's high enough, but I doubt you own as much stock as the people on the board.

To be clear, they haven’t actually rejected the offer yet, they’ve simply limited the ability of Musk to acquire a majority stake in the case that they reject.

it's radical to equate dollar values with objective goodness

Fiduciary duty, such as it is, only extends to dollar value; and there is no other criteria to sue the board over.

Note that I'm all for companies having much more legal responsibility to other stakeholders, not just shareholders, but that is somewhat irrelevant for a discussion of whether the board could be successfully sued over adopting this decision.

True, but the GP's phrasing of "equate dollar values" implies a sort of cut and dried interpretation. A mechanical calculation of a short-term price snapshot is not the only thing that matters. If the board has good reason to believe that Musk will be bad for the stock price in the long-term then there wouldn't be any breach of fiduciary duty.

That's not exactly true, as Musk's offer is to buy the company outright, making it private (and thus buying out all shareholders), as I understand - so there is no concept of how Musk's ownership would affect the stock price. Still, the board can easily argue "we believe shareholders will be able to achieve higher profits in the future by maintaining their ownership than by selling all stock at Musk's offered price today".

He claims that he wants to “retain as many shareholders as is allowed by the law” [0] which is just as fictional as it was when he pretended to try to take Telsa private.

[0] https://www.bloomberg.com/opinion/articles/2022-04-15/sure-e...

It's not that radical to equate dollar values with "good for stockholders". At least in my impression that is what most stock holders care about.

There's an entire sector of funds that include criteria around environmental, social, and governance impacts in addition to returns on investment.

https://www.investor.gov/introduction-investing/general-reso...

Exactly. Profit does not always equal good.

One of my favorite books: "Small giants, companies that choose to be great instead of big"

If North Korea offered $60 billion to buy Twitter would Twitter be forced to sell? Not comparing Musk to NK, but money isn't the only consideration when an offer to sell comes in.

North Korea is under heavy sanctions and is thus a poor choice.

But if France put a bid on twitter, they would be forced to entertain the offer.

If the China Investment Corporation offered $60 billion to take Twitter private would Twitter be forced to entertain the offer?

China is not under sanctions, but the odds are excellent that the US government would flip out and prohibit Twitter from selling.

No, but only because you chose North Korea.

They certainly had no problem with selling to Saudi Arabia.

North Korea is under economic sanctions by USA. Your hypothetical is stupid for a whole bunch of reasons.

Indeed, what happens when Elon starts his own platform instead and uses some of the ~$40 billion he'd otherwise buy Twitter with instead on paying top users of Twitter to exclusively use his platform instead?

> what happens when Elon starts his own platform

He wouldn't bother because it'd be a failure. Twitter's tech stack isn't worth 40 billion, Musk could clone twitter for less than $500m, but just having a platform doesn't accomplish much, the overwhelming majority of twitter users have no reason to leave twitter.

Parler didn't fail because it was unable to attract a userbase.

Parler failed because it was never actually able to do and be what the incoming user base thought they were promised —- a free, uncensored bastion. Since that would never work at a bigger size with mainstream attention, there’s no real diff. Parler being a grift makes it all muddied any how.

That is why it failed - technical mistakes aside.

I bet there would be a whole lot of people that would join elon-twitter.

They said the same thing about truth social.

I'd ditch twtr in a heartbeat, at this point it's a cesspool in every sense.

There are already alternatives to Twitter. Why haven't you ditched it already?

I'm aware, and do you realize nobody of note is using the alternatives? Why would you recommend someone invest time building a presence in yet another loser platform with bleak future prospects? Doesn't seem helpful or all that bright.

For a real alternative to succeed, solid backers focused on dethroning tw are needed to inspire confidence and stability, then we all need to jump at about the same time to get the momentum going and bounce out of the twatterverse.

As it stands now, there is no real competition.

> I'm aware, and do you realize nobody of note is using the alternatives?

That's exactly the point - there is no reason to believe this would change if Musk created his own social network.

I'd be willing to give it a shot if it's backed by $$$ and a progressive technologist.

Your two comments show you’re the perfect audience and user for an Elon social platform. Every failed or failing Twitter esque platform has some number of perfect audience fits. The problem is that those aren’t enough users. There is no reason to believe an Elon venture would fare markedly better.

The amount of users who once used twitter minus still use twitter is greater than current twitter users. You could build off of everyone rejecting twitter.

Most people who have “rejected” Twitter did not do so because of Twitter issues but wanting micro blogging sort of social platform.

Most rejected the overall concept. The amt of users that stil want something similar but not Twitter AND who will be appeased by whatever alt Twitter is made is an even smaller number.

That only makes sense if everyone who stopped using Twitter is some kind of united cohort. Many people were simply not interested in the format, didn't find content that cared about, didn't have friends using it, drifted off to other social networks etc. Good luck gathering all of these people together on a new platform.

Do you remember Google Plus? Google had excellent financing and an existing team of excellent software developers and couldn't pull of a credible alternative to facebook.

The world is littered with the expensive corpses of failed software.

Much of Facebook could be cloned by many startups see VK.

Google's product lacked purpose. It died because of a lack of vision and leadership and product mistakes (real names).

It died prematurely. Google treated the product like a pilot a network threw on the first week of September. It had solid numbers and given time it could have found itself if it found a backer in leadership.

What would happen is that it would almost certainly fail to make any impact.

Not everyone buys a stock for a quick short-term turnaround. If I expect Twitter to 20x in the next 5 years why would I want to sell my share to Elon?

And existing investors all have the option to cash out today for just 17% less than Musk's final offer.

Twitter has operated for 16 years and public for about 10, explosive growth of their userbase is in their past and monetization strategies have already been implemented for years. There is no reason to believe it has the potential for such growth.

Then why were they holding the stock the day before Musk got involved?

They feel there is potential for growth, just not flights of fancy like you describe.

If you expect Twitter to 20x in the next 5 years, then

a: You're dreaming.

b: You're absolutely expecting a quick short-term gain.

> b: You're absolutely expecting a quick short-term gain

To put this in perspective, 20x in 5 years is an 82% CAGR. And five years is far short of the length of an economic cycle. Traditionally, "long term investing" meant across at least one whole business cycle.

> If I expect Twitter to 20x in the next 5 years why would I want to sell my share to Elon?

Vote with your dollars: buy shares at a price higher than Elon's. Borrow if you must. If you are not ready to take that risk, then maybe your expectations are more wishful thinking than anything real.

And why wouldn't be? He is offering a premium from the current valuation. You either accept it or reject it if you think the premium is low, or am I wrong?

The board’s mandate is to maximize shareholder value. They have an offer that will objectively maximize that value. To scorn it in favor of intangibles is to act against the interest of shareholders.

The boards mandate is one of fiduciary duty. Bluntly, that is not a mandate to maximize shareholder value, especially in the short term.

They do not have an offer that will maximize shareholder value - they have an offer that will increase it.

Words have meaning and concepts have definitions. They are not arbitrary of flexible for the sake of making the argument you want.

The BOD's responsibility is to the company, a public company's responsibility is to the shareholders - this difference matters.

Cornell's legal information institute provides a nice and cited set of definitions (albeit in legalese) - https://www.law.cornell.edu/wex/fiduciary_duty

According to your logic, any offer to go private above market value must be accepted. That's not the case. Stockholders might be interested in owning Twitter stock for a long time. Elon's offer might not make financial sense for them.

No, a board is mandated to act in the best interests of the shareholders. That might be different than just maximizing the share price. They may believe this is a bad idea for the company as a whole, and that long term, it's objectively better for the company to not be owned by Musk.

isn't musks offer to buy out all the shareholders. i.e. lets take a crazy example.

you have a company that is worth $1mil and we only imagine that it can be worth $100mil (based on the size of the market we are addressing). someone comes and offers $200mil but we know he will shut the company down (i.e. liquidate all its assets, or even simply the desire to destroy the company).

While this might be sad for the company, why is it not in the interests of the shareholders to take the offer?

so if Musk is willing to offer more than shareholders expect to see in the forseable future, why does it matter what will happen to the company after that? their interest in the company ends when their shares are purchased.

Musk is trying to buy everyone out because he wants to influence the direction of Twitter. Why not ascribe a similar set of motivations to the other current shareholders? If that is a motivation for them, then shareholder profit is not the only relevant sense of shareholder value.

This isn't an argument for the poison pill clause, but is an answer to the following quoted question. It is funny to see this motivation of most existing shareholders ignored in order to bring into being analogous motivations of another. Especially when Musk's offer for Twitter has been in order to change it promote certain values, but conspicuously, better profits has not been one of those touted values.

> While this might be sad for the company, why is it not in the interests of the shareholders to take the offer?

I will sabotage my own argument somewhat though and say that I believe the economic motive dominates over time and is almost always (in macro and micro) the primary force.

> willing to offer more than shareholders expect to see in the forseable future

That is your assertion/opinion (yes, shared by many, sure). But it's not the only opinion in this case, and so I don't think the analogy holds.

Sure, I could see in the abstract times where an offer it just unavoidably good, and so it would not be in the best interest of shareholders to take it. But in this specific instance, there is a lot to be said on both sides of the offer (taking vs. rejecting it).

I would also argue that, depending on the purpose and goals of the company, knowing that a person intends to shut it down would be a reason to value existing (in order to continue carrying out their purpose) over money.

Sure - if an offer is greater than the conceivable return then of course you take it, but Musk's offer is less than the stock traded at 6 months ago and 30% below the stock's all-time-high from 14 months ago.

It's also not just about $$. In your scenario, it's just negotiating. It's possible the Twitter board and shareholders are just unwilling to ever sell, regardless of the money involved. (I don't know if that'd ever be the case, just that is is possible, and possible within fiduciary responsibilities.)

If someone offered to buy your house at a 25% premium, would you sell? A house is a place to live at, in addition to having a dollar value, and so is Twitter - a powerfool tool to control speech, in addition to its dollar value on the market.

Absolutely, buy another one at market value and give the buyers my card for the next time they want to give me $xxx000.

Getting paid a 25% premium for my stock sounds pretty good to me.

What if the stock goes higher in the future?

What if the stock crashes in the future? Having a guarantee profit sounds like a pretty good deal for some.

Guaranteed profit at the point in time is great for speculators. If you're doing long term investment, realizing profit at random point in time, isn't really that attractive.

What ? Even if you're a long time investor, having an instant 25% guaranteed profit is good as you can sell part of the stock and diversify.

If you follow that logic, each time stock goes after good earnings, everyone should just sell off everything.

They should, provided transaction fees and gains taxes don’t exceed their estimation of the difference in value times the number of stocks adjusted for the time value of money.

People with more complicated positions should consider covariance and factor in uncertainty. But if you’re a shareholder in a single stock and estimate that it’s overvalued by a significant margin, the rational choice is to sell your position, invest in a low risk, highly liquid asset, and rebuy.

Maybe - it depends on the growth prospects of the company - if they were high anyway - then it is better from a capital gains tax perspective to just continue holding the stock until you need the money.

I sold a lot of bitcoin for $20 in 2008, quadrupled my initial investment and felt pretty smart about it.

Good logic. Never sell anything ever because the price might go up.

Not for Twitter's board. They want more, and good for them. In the history of hostile acquisitions, the first offer is never the final one.

It is irrelevant.

I'm sorry that sort of argument makes no sense. Anything could happen in the future, but the price today is what the market judges it to be worth.

The historical price is irrelevant as well. Looking at the historical price is the same sort of thinking that leads to "throwing good money after bad".