The full version of this article, along with thousands like it, can be found here: Twitter: let the battle for ownership commence
Elon Musk has seemingly been an advocate for what we call 'logical libertarianism' for quite some years now.
A belief system that leans heavily towards personal freedom and less red tape, but unlike pure libertarians does see the need for some regulation as and where society needs it.
His latest tweets about free speech and democracy were followed by a bid for Twitter. This has of course been heavily reported across the web and covered ad nausea by tech and political commentators.
Twitter's Board of Directors, a group of esteemed professionals with quite diverse backgrounds, but little in the way of share ownership in the company adopted what is known as a “poison pill” last week in response to his very public $43 billion bid to acquire.
Assuming Mr Musk hits the 15 per cent ownership threshold that the tactic is designed to be introduced at, the value of Musk’s stake would be impacted as shares are diluted. Twitter would then give other investors, including themselves(?) the right to buy a new shares at a discounted price.
Big shareholders and investment advisers complained they were too effective in deterring activist investors and unsolicited bidders, which depressed share prices.
Critics of the poison pill tactic have contested the validity in US courts, with Board members likely mulling over the argument as to whether this extreme tactic is in conflict with their fiduciary duties, as Directors.
We suspect that the board at the microblogging platform want to give themselves a little breathing room in order to consider not just his bid, but potentially other bids that may, or may not be in the process of emerging.
The options for the CEO of Tesla, and currently the world's wealthiest businessman seem to be quite good.
He could attempt any/all of the following tactics:
- Continue to seek board approval
- Ignore the Board of Directors and seek to acquire the business via a tender offer direct to shareholders
- Seek 2-4 likeminded UHNWI's, or financial institutions to join the effort in order to achieve a controlling stake
Whilst a tender offer is the most likely outcome... and Musk himself has tweeted "Love me tender", the third option may also come into play.
We wait with baited breath as to what the outcome of this is. In many ways it could be as important culturally as it is from a business perspective.
The unknowns are plenty; and their will be additional suitors likely to enter the fray now a price point per share has been established.
The team at Platform Executive hope you have enjoyed the '[post_title]' article. Automatic translation from English to a growing list of languages via Google AI Cloud Translation. Reporting by Rob Phillips.
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