>>If it's true what he said that he is buying it to help the world rather than for profit then $70+ price should be easy to justify.
Where on earth do you get that
$70 is insane, Twitter will likely never reach that again, it for sure will not under current leadership. Twitters current leadership is killing the platform
It doesn't matter whether the stock is likely to reach $70 or not. What matters is that musk must convince the majority of stock holders to sell him their shares. If he wants to take over the company. The current offer is getting rejected. He'll need to up his bid. He really needs to offer a price they or the board can't refuse. A price way closer to the all time high or above it. No shareholder is going to give up their shares for altruistic reasons, that's not why the bought them, so they are waiting for the right price.
I don’t think it is the majority — I think he needs all of them. Anything less than 100% and he’d have to worry about fiduciary duty to minority shareholders. And if taking a company private, you need to have all of the shareholders on board.
I might not fully understand this dynamic, but I thought that was the reason why he wanted to buy 100% and not just a controlling interest.
Once a stockholder gets control of the majority of the stock he/she can do whatever they want short of fraud. Hence, if I control 50+% of the shares I can sell the company to anyone and take it private if that's what I want. The board would still need to approve it but as the controlling shareholder I can replace the board with members that will do what I want so they can't stop me. Again, I can't commit fraud but if I can justify it then I can do it. No minority stock holder can stop me.
But, Musk has stated that he wanted to take Twitter private. Doesn't that change the calculations somewhat? I mean, you want to buy all of the shares at once, otherwise, how do you determine the fair market price for the last hold-out shares? They would be worth more that the early sellers.
I guess I'm saying that because he has a stated interest in taking the company private, this is more complicated than a traditional M&A event. (Hence why it may not be worth it to do this as a hostile takeover).
It doesn't have to be fair to you just the majority of the stockholders. True, you can reject the offer as a stockholder but the company's stock will be taken off the exchange once the 50+% stockholder decides the company will no longer be public. So if you want to ever sell you'll have to look for a buyer yourself. Imagine having all your money locked up. Not knowing when, if ever, you'll be able to get your money out. Also, if you try to go to court then you'll have to finance the suit and you'll have to have a valid reason to go to court. And to top it all as a minority stockholder you'll have very little influence over how to run the company. It's easier to sell at the price that's offered.
Almost every public company has a forced buy-out clause in their stock's trading and ownership rules. That is, if someone ends up owning $VAST_MAJORITY of a company's stock, they can then forcibly purchase the small fractions off at an acceptable going-private premium.
I think the threshold for forced buy-out tends to be >90%.
You always have to treat owners essentially equally but only a majority is typically required to make decisions. Meaning you can’t decide to give one owner distributions or dividend and not other owners using just a majority vote but you can take most action that guides the company.
I remember GME and what happens when big fish comes and publicly demands a big chunk.
Stocks are not commodities, offer is highly inelastic. They are precisely limited and traded as such. Especially when we are talking about profitable and political-weight-size media company.
Where on earth do you get that
$70 is insane, Twitter will likely never reach that again, it for sure will not under current leadership. Twitters current leadership is killing the platform