A lot of people in this thread share your opinion, but I'm a bit confused by it.
If the board acted against the usual shareholder interest (to make money) by turning down an offer 54% above premium, would it not be easy to claim that the board is not in it to make the average investor money on $TWTR?
Therefore, wouldn't the value of $TWTR as an investment be far far less than companies who do make it their primary goal?
That's not to even mention the 9% of Elon's stock that he claimed he would now sell.
Yeah but that analysis downplays the shareholders’ thoughts about the future. If they largely feel like Twitter’s real value is $100B, that it just hasn’t been realized yet, and that they think it can be realized, then it totally makes sense to turn Elon down.
In reality though, the shareholders are a giant mob of people with wildly varying views about Twitter’s place in society, its true value as an asset, its ability to achieve its true value, and just generally what the best way to “make the most money for the shareholders” is. So I don’t think it’s an open-and-shut case that the board betrayed the shareholders. It’s probably a muddy case that’ll play out in court over months or years.
It is the _directors_ making decisions here, not the shareholders. Those directors were chosen by management, and -- newsflash! -- they are beholden to management. They must jump through some legal hoops to discharge their fiduciary duties and protect themselves from lawsuits, but at the end of the day they'll do what management wants.
Does management want to maximize the value of Twitter? Er, no. Management wants to maximize some combination of their compensation, their agency controlling a company, and their social capital controlling a social media platform. Maximization of shareholders' value is a legal objective to which management must pay legal lip service, but it is not in any way shape or form the interest of management, save insofar as management compensation is related to share price.
If management cared about shareholder value, it would not have induced the board to enact this poison bill nonsense.
> It is the _directors_ making decisions here, not the shareholders. Those directors were chosen by management, and -- newsflash! -- they are beholden to management.
Shareholders can appoint, remove or replace directors, or even the entire board.
Twitter’s board doesn’t have any obligation to maximise short-term profits for investors (or maximise profits generally) - there has always been a misconception that companies/directors had to by law but the actual laws are much more general.
But at the end of the day, if the board thinks that Twitter may be worth more long term than what Musk is proposing to buy it for, then it’s perfectly reasonable to argue that it’s in the shareholder’s interests not to sell it.
If the board acted against the usual shareholder interest (to make money) by turning down an offer 54% above premium, would it not be easy to claim that the board is not in it to make the average investor money on $TWTR?
Therefore, wouldn't the value of $TWTR as an investment be far far less than companies who do make it their primary goal?
That's not to even mention the 9% of Elon's stock that he claimed he would now sell.