When proposing his incredibly generous Twitter takeover offer, which any other board would have accepted in a heartbeat, Musk remarked that it would be “indefensible” for his offer not to be put up to a shareholder vote.
And, after initially rejecting his proposal, it appears that a change of heart is brewing in Northern California.
More exactly, looks like Twitter is rethinking Musk’s offer after seeing the market absolutely hemorrhage losses once again on Friday.
After all, Friday witnessed the worst stock market downturn since October 2020 (right before Biden was elected), and, given the Biden administration’s continued ineptitude in a number of different situations, it is not at all unlikely that Twitter’s share price may well plummet to $30 or below.
Which would mean a massive shareholder lawsuit, as the company has already egregiously breached its fiduciary duty by not accepting Musk’s offer.
After all, while on the precipice of a clear recession (just look at housing prices relative to average wages, not to mention massive inflation), it probably isn’t the best idea in the world to shoot down an activist investor, which is precisely what Musk is at this point.
Just as activist investors have stepped in for other ailing companies, including Barnes & Noble and other companies they believe in, especially companies that help offset the Bezos-led monopoly with Amazon, Musk too is taking over a company ailing in a different way.
Curiously, no one seems to have an issue with Bezos buying WaPo or Zuckerberg continuing to zing the public with Facebook, but when the CEO of one of the “greenest” companies out there (i.e., Tesla) tries to buy Twitter, the whole world turns upside down.
Which led the Twitter board to make a very stupid move, namely a “poison pill” approach to Musk’s offer, which would essentially make buying Twitter far more expensive for Musk.
Needless to say, that “poison pill” approach likely will not elevate share to $54.20, Musk’s “best and final” offer, which will likely irritate quite a few shareholders, to put it mildly.
With that in mind, Twitter’s rather hilarious statement over the weekend makes more sense.
“[Twitter is] continuing to conduct a careful, comprehensive, and deliberate review to determine the course of action in the best interest of the company and all Twitter stockholders,” Twitter declared.
Translation: Twitter executives spoke to their lawyers and realized that fiduciary duty might be a tad more important than social media approval.
Especially, you know, with a recession likely looming.
This time, however, the White House can’t run to quantitative easing (QE) like it did under good old Obama, whose increasing public appearances are raising further suspicion about who’s really running the White House.
Besides, Twitter can always silence the opposition anyway, as it’s long done with conservatives, at least until Musk takes over.
It would be great if Musk were to add Trump to the Twitter board, if only to further validate his “free speech absolutism” and further inflame the left.
Plus, the left will be so distracted by Trump on the board that Musk can do quite a few other things in the furor without intensive scrutiny from the media.
The New York Times has kept careful track of Musk’s potential takeover of Twitter, if only because they now fear being fact-checked the same way Trump was.
And, unsurprisingly, the publication just couldn’t resist trying to make Musk’s offer seem less good than it is.
“Mr. Musk’s offer for Twitter is a 54 percent premium over the share price the day before he began investing in the company in late January. But Twitter’s shares traded higher than Mr. Musk’s bid for much of last year,” the Times sniffed.
Clearly, Times writers need a better background in macroeconomics.
“Last year” interest rates still hovered around 0 percent and World War III wasn’t just around the corner, at least not to the White House’s knowledge (or was it …?)
“This year,” economic circumstances have changed tremendously, including a massive drop in even Facebook share prices, so the Times writers are especially deluded if they think Twitter will magically soar to over $54.20 per share when it’s more likely to revert to $20.54 per share, especially if interest rate hikes become more aggressive.
Unlike Facebook, Twitter went woke before it figured out the optimization of ad revenue, which is precisely why the company has remained mired in a financial mess for quite some time, at least in part.
Now, it appears at least an attorney or two is getting through to the ideological echo chamber masquerading as management at Twitter.
Which means that this week may just end on a very high note (no pun intended) for Twitter shareholders.
Author: Jane Jones