Twitter ownership

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manatee2005
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Twitter ownership

Post by manatee2005 »

I think Twitter has a large potential to increase market cap if they are run properly. In the whole recent battle for ownership it was revealed that Vanguard owns about 10% of Twitter.
My thought was always that it’s not Vanguard itself but actually people who invest in Vanguard funds and then Vanguard has to buy the stock.
However who has the voting rights on those shares?
Let’s say a Vanguard fund has 1% of its fund in Twitter. Let’s say I invest $4500 in that fund, which means $45 of my investment would be used to buy Twitter which would be 1 share. So I own 1 share of Twitter through the Vanguard fund, however I don’t ever remember getting a shareholder voting packet for a fund I own through vanguard. So does Vanguard vote how they want with that 1 share that actually belongs to me?
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JoMoney
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Re: Twitter ownership

Post by JoMoney »

manatee2005 wrote: Wed Apr 20, 2022 9:20 pm...
However who has the voting rights on those shares?
...
So does Vanguard vote how they want with that 1 share that actually belongs to me?
The mutual fund / Vanguard votes the shares.

If you buy a mutual fund, you don't control the assets of the fund. You own a share of a "Regulated Investment Company" a.k.a "mutual fund".
You can vote on certain aspects of the mutual funds operations, you may be able to vote for the funds board of directors that will hire a manager of the funds assets... but that's where your control stops.

There is an implicit (sometimes explicit) responsibility for the company (both a mutual fund company or other individual stock company) to manage the assets for the shareholders benefit. Sometimes there are lawsuits where it's found the companies management or board has breached their fiduciary responsibility to the shareholder "owners" they are expected to act in the best interest of.
Last edited by JoMoney on Wed Apr 20, 2022 9:49 pm, edited 1 time in total.
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Weathering
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Re: Twitter ownership

Post by Weathering »

Yes, Vanguard votes that share. There are rules about how they must vote (possible in line with ISS, or just in a fiduciary capacity vs. self-interest).

I’d like to hear why you think Twitter could be more valuable if changes were made?
Will there be ...More users? More activity from users? More advertising? More business presence instead of just individual’s presence?
Personally, I think TWTR is a place people go to shout, where no one will hear them. People will hear them, but no one reads the replies so it’s like they don’t exist.

Calls and Puts on TWTR are shockingly cheap (less than 1% for 4/29, and lower on a per week basis for longer term). So, I’m sure that I’m too old to understand the value and I’ll stay away from buying or shorting.
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Re: Twitter ownership

Post by SlowMovingInvestor »

VG's total stock market fund has 4000+ holdings. I'm not sure you'd want to analyze each stock among those to see if it's properly managed and tender a proxy vote :happy.

In general, VG or other index fund investors aren't activists and tend to go along with management in most circumstances, IIRC. Honestly, I can remember hardly any case where a passive fund played a role in corporate drama. Even actively managed funds aren't often activist.

If you want activism, you should go with Hedge Funds or takeover funds or PE funds. Or buy the stock directly, especially if you feel the stock has arbitrage opportunities.
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manatee2005
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Re: Twitter ownership

Post by manatee2005 »

Weathering wrote: Wed Apr 20, 2022 9:48 pm Yes, Vanguard votes that share. There are rules about how they must vote (possible in line with ISS, or just in a fiduciary capacity vs. self-interest).

I’d like to hear why you think Twitter could be more valuable if changes were made?
Will there be ...More users? More activity from users? More advertising? More business presence instead of just individual’s presence?
Personally, I think TWTR is a place people go to shout, where no one will hear them. People will hear them, but no one reads the replies so it’s like they don’t exist.

Calls and Puts on TWTR are shockingly cheap (less than 1% for 4/29, and lower on a per week basis for longer term). So, I’m sure that I’m too old to understand the value and I’ll stay away from buying or shorting.
Twitter has 7500 employees right now, which is double what they had in Dec 2018. What are they working on? I have no idea. There has been almost no improvement to Twitter and they can't even make an edit button. I think management is really horrible.
You can't even monetize your tweets unlike Youtube where you can monetize your videos. They need to incentivize the people who provide value to tweet more.
I could provide more ideas if I am appointed to Twitter Board :-)
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Re: Twitter ownership

Post by manatee2005 »

SlowMovingInvestor wrote: Wed Apr 20, 2022 9:53 pm VG's total stock market fund has 4000+ holdings. I'm not sure you'd want to analyze each stock among those to see if it's properly managed and tender a proxy vote :happy.

In general, VG or other index fund investors aren't activists and tend to go along with management in most circumstances, IIRC. Honestly, I can remember hardly any case where a passive fund played a role in corporate drama. Even actively managed funds aren't often activist.

If you want activism, you should go with Hedge Funds or takeover funds or PE funds. Or buy the stock directly, especially if you feel the stock has arbitrage opportunities.
Yes, the management knows that if 50% or more of their shares are owned by the funds they have nothing to fear because the funds will just vote what the management proposes. I guess that's when you get Carl Icahn and others that get involved.
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Re: Twitter ownership

Post by ChesterK »

Twitter management is really horrible. They focus on building features nobody really wants, usually aping other social media companies, because they have no ideas of their own. A lot of Twitter's best and most iconic features were actually invented by its user base (such as hashtags and retweets), so it's hard to remember when a good idea last came from the company

But I really doubt Elon Musk is gonna fix Twitter. He's explicitly said he's not interested in the economics of it. For him it's about free speech. Twitter's problem isn't a lack of free speech. It's main problem is most people just don't get into it because it's hard to set up a social graph where most of the people you want to follow are not people you know IRL. Facebook's social graph can basically set itself up by recommending to you friends of friends. This is a hard problem to solve

I think what Musk's being a little naive about is how essential some level of moderation is to social networks in order to prevent them from being overridden by bots and malicious actors. Twitter is especially prone to dogpiling (whether automated or groups of people doing coordinated trolling). If Twitter could get away with no moderation they would. It's not easily automated so costs them a lot of money. Human moderators also can make mistakes, which then reflect poorly on the company. But if they got rid of this is would be much worse. It already has a reputation for being incredibly toxic. And if the platform became unusable it wouldn't help increase the value of the company.

Personally if I were that rich I don't think Twitter would be high up on my list of companies I'd want to buy. It's an iconic brand but has a lot of negative associations. Running it is painful and there's not an easy path forward to unlocking more value, which is probably why Jack Dorsey bailed.
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Re: Twitter ownership

Post by impatientInv »

Around a year ago TWTR stock was over $78 per share that is $62B+ market cap. If someone offers above that, the board will have to accept.

Elon's offer is $43B. The board is expecting higher.
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Re: Twitter ownership

Post by z3r0c00l »

manatee2005 wrote: Wed Apr 20, 2022 9:20 pm I think Twitter has a large potential to increase market cap if they are run properly. In the whole recent battle for ownership it was revealed that Vanguard owns about 10% of Twitter.
I agree that a market cap of $35 billion is silly when other prominent social media sites are so much larger. Even LinkedIn was purchased for $26 billion! I think Twitter could easily be worth 10x its current cap if it unleashed its full potential. Musk has neither the maturity, focus, or business acumen to help them. If he takes the company private we can all make a small profit on the deal and then it isn't our problem anymore. I believe they should take the deal at $75 a share if he offers it. I don't think he has enough money for that alone but with the help of a bank or two it is certainly doable.

However I do wish that Vanguard would start advocating for shareholders at companies where large amounts of money are wasted on huge offices and outsize compensation like $500,000 a year for 20-something programmers to sit on balance ball chairs and move emails around.
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Re: Twitter ownership

Post by firebirdparts »

manatee2005 wrote: Wed Apr 20, 2022 9:20 pm I think Twitter has a large potential to increase market cap if they are run properly.
I would be very cautious about this part of it. This is what gets folks into the most difficulty.
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Re: Twitter ownership

Post by impatientInv »

z3r0c00l wrote: Thu Apr 21, 2022 5:44 am I think Twitter could easily be worth 10x its current cap if it unleashed its full potential.
manatee2005 wrote: Wed Apr 20, 2022 9:20 pm I think Twitter has a large potential to increase market cap if they are run properly.
Board has broad discretion over when to agree with a buyout offer. Especially because $43B offer is less than $64B recent high.

If this is about shareholders rights and Twitter is so amazing why doesn't Elon not offer $70B? That would be 10% premium over recent high. And would surely be acceptable to Twitter board and shareholders.

Two additional points
1. Elon using Twitter keeps it relevant. His use and interest in Twitter is very valuable to it. If Elon stops using Twitter, it will likely lose $5B+ valuation.
2. Twitter is called a "public town square". Important for spreading information, moulding public opinion and during emergency/war. Would this be an appropriate private company?
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Re: Twitter ownership

Post by SlowMovingInvestor »

z3r0c00l wrote: Thu Apr 21, 2022 5:44 am
manatee2005 wrote: Wed Apr 20, 2022 9:20 pm I think Twitter has a large potential to increase market cap if they are run properly. In the whole recent battle for ownership it was revealed that Vanguard owns about 10% of Twitter.
I agree that a market cap of $35 billion is silly when other prominent social media sites are so much larger. Even LinkedIn was purchased for $26 billion! I think Twitter could easily be worth 10x its current cap if it unleashed its full potential. Musk has neither the maturity, focus, or business acumen to help them. If he takes the company private we can all make a small profit on the deal and then it isn't our problem anymore. I believe they should take the deal at $75 a share if he offers it. I don't think he has enough money for that alone but with the help of a bank or two it is certainly doable.
My feeling is that with social media sites, you either get acquired by a giant (LinkedIn, WhatsApp, Instagram) or you become a giant. Otherwise you become an Also Ran.

I'm not that familiar with Twitter's history, but they did solve one technical problem well early (making a back end that is able to distribute tweets fast to a huge crowd, while simultaneously allowing those who follow lots of people to get notifications). But it seems to have been lax in introducing new features using that backend.

Honestly, if I were a direct Tesla shareholder, I'd be concerned about pressure on Tesla if Musk were to take over Twitter. Tesla has a huge footprint in China, and the Chinese government doesn't hesitate to use its clout on Western corporates.
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Re: Twitter ownership

Post by SlowMovingInvestor »

impatientInv wrote: Thu Apr 21, 2022 7:12 am 1. Elon using Twitter keeps it relevant. His use and interest in Twitter is very valuable to it. If Elon stops using Twitter, it will likely lose $5B+ valuation.
Independent from his offer (of course, it's hard to delink his offer from his tweets), I doubt merely his stopping using it would cause it to $5B valuation. There have been people with even larger followings who left or went silent on Twitter, such as entertainment personalities who started focusing on Instagram. I remember Ariana Grande leaving it last December, other top personalities going mostly silent.

This discussion prompted me to look at twitter. The top trending topic was some new crypto coin going public (or being pumped). Ugh ...
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Re: Twitter ownership

Post by z3r0c00l »

impatientInv wrote: Thu Apr 21, 2022 7:12 am
2. Twitter is called a "public town square". Important for spreading information, moulding public opinion and during emergency/war. Would this be an appropriate private company?
Why would you consider a public, for-profit corporation any more trustworthy than a private one? Like Enron was so trustworthy when it came to disseminating information about energy needs? Unless you want to government to seize and regulate twitter, it is going to be like the rest of the internet; full of misinformation and junk that the user has to filter out. The government can disseminate information directly through their web pages, established media, texts, etc.
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Re: Twitter ownership

Post by JoMoney »

z3r0c00l wrote: Thu Apr 21, 2022 8:25 am
impatientInv wrote: Thu Apr 21, 2022 7:12 am
2. Twitter is called a "public town square". Important for spreading information, moulding public opinion and during emergency/war. Would this be an appropriate private company?
Why would you consider a public, for-profit corporation any more trustworthy than a private one? Like Enron was so trustworthy when it came to disseminating information about energy needs? Unless you want to government to seize and regulate twitter, it is going to be like the rest of the internet; full of misinformation and junk that the user has to filter out. The government can disseminate information directly through their web pages, established media, texts, etc.
Everybody/anybody can start their own webpage, forum, mailing list, etc... The Internet is the "public square" Twitter is just a highly centralized, highly trafficed, place on it.
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Re: Twitter ownership

Post by Whakamole »

impatientInv wrote: Thu Apr 21, 2022 7:12 am Board has broad discretion over when to agree with a buyout offer. Especially because $43B offer is less than $64B recent high.
It may have been worth $64B at some point, but it's not worth that now.

I'm reminded of how the board of Yahoo which rejected an offer from Microsoft for $44.6 billion and ended up selling itself to Verizon for a tenth of that. I'm reminded of Pets.com which also rejected a buyout offer, and a company with a maximum market cap of $300 million was sold off in parts for $30 million. There are many other examples.

I would hope an index fund is not speculating on the future share price of a company. Vanguard (and BlackRock and others) have a duty to shareholders, not the board.
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Re: Twitter ownership

Post by brawlrats »

Whakamole wrote: Thu Apr 21, 2022 10:51 am

I'm reminded of how the board of Yahoo which rejected an offer from Microsoft for $44.6 billion and ended up selling itself to Verizon for a tenth of that. I'm reminded of Pets.com which also rejected a buyout offer, and a company with a maximum market cap of $300 million was sold off in parts for $30 million. There are many other examples.
Don't forget my all-time favorite...Groupon turning down a $6 billion offer from Google. It now has a market cap of $600 million, including a 1-for-20 stock split in 2020.
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Re: Twitter ownership

Post by Whakamole »

brawlrats wrote: Thu Apr 21, 2022 11:10 am
Whakamole wrote: Thu Apr 21, 2022 10:51 am

I'm reminded of how the board of Yahoo which rejected an offer from Microsoft for $44.6 billion and ended up selling itself to Verizon for a tenth of that. I'm reminded of Pets.com which also rejected a buyout offer, and a company with a maximum market cap of $300 million was sold off in parts for $30 million. There are many other examples.
Don't forget my all-time favorite...Groupon turning down a $6 billion offer from Google. It now has a market cap of $600 million, including a 1-for-20 stock split in 2020.
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Re: Twitter ownership

Post by SlowMovingInvestor »

Whakamole wrote: Thu Apr 21, 2022 10:51 am
impatientInv wrote: Thu Apr 21, 2022 7:12 am Board has broad discretion over when to agree with a buyout offer. Especially because $43B offer is less than $64B recent high.
It may have been worth $64B at some point, but it's not worth that now.
If a company was worth $64B in just the last year (at least according to the stock market), it's not unreasonable to conclude it could reach that number again and therefore a higher valuation is warranted.
I'm reminded of how the board of Yahoo which rejected an offer from Microsoft for $44.6 billion and ended up selling itself to Verizon for a tenth of that. I'm reminded of Pets.com which also rejected a buyout offer, and a company with a maximum market cap of $300 million was sold off in parts for $30 million. There are many other examples.
And Facebook also turned down an offer from Yahoo, which turned out to be a good move. We can find examples the other way too, many successful companies had buyout offers at some point.

Also, I can remember hardly any previous takeover battle/LBO etc. where index funds played a major role. There's enough stock in the hands of non- index investors to be decisive here.

I don't have a strong opinion either way (or a strong opinion on Twitter, for that matter, I only look at it for weather alerts), I'm just making a general point.

Oh, and speaking of Yahoo, MSFT"s offer was at a 60%+ premium to their stock price. Certainly seems like a pretty hefty premium, not like the offered premium for Twitter.
Last edited by SlowMovingInvestor on Thu Apr 21, 2022 4:30 pm, edited 1 time in total.
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Re: Twitter ownership

Post by arcticpineapplecorp. »

ChesterK wrote: Thu Apr 21, 2022 5:07 am But I really doubt Elon Musk is gonna fix Twitter. He's explicitly said he's not interested in the economics of it. For him it's about free speech.
Free speech is certainly not free if it's going to cost Musk $43,000,000,000.00.
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Re: Twitter ownership

Post by jebmke »

arcticpineapplecorp. wrote: Thu Apr 21, 2022 4:27 pm
ChesterK wrote: Thu Apr 21, 2022 5:07 am But I really doubt Elon Musk is gonna fix Twitter. He's explicitly said he's not interested in the economics of it. For him it's about free speech.
Free speech is certainly not free if it's going to cost Musk $43,000,000,000.00.
Only if he uses his own money, right? Of course, a judge just instructed a jury that his statement that he "had funding" in a prior situation was not true.
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Re: Twitter ownership

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Re: Twitter ownership

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Re: Twitter ownership

Post by nisiprius »

Until Matt Levine explained it in his Money Stuff column, I didn't understand that Musk's mention of $54.20/share was probably a cannabis joke, just like his 2019 $420/share "funding secured" tweet.
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Re: Twitter ownership

Post by pension4ever »

nisiprius wrote: Thu Apr 21, 2022 8:46 pm Until Matt Levine explained it in his Money Stuff column, I didn't understand that Musk's mention of $54.20/share was probably a cannabis joke, just like his 2019 $420/share "funding secured" tweet.
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Re: Twitter ownership

Post by Weathering »

I know that (so far) I have been completely wrong on this one (I expected the potential deal to fall apart). However, now I'm going to double down (this is all just verbal speculation with no $ on the line) and say that Musk will back out of the now agree to deal.
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Re: Twitter ownership

Post by harikaried »

Sounds like Elon Musk has wanted to try to retain as many existing investors even now that "Twitter, Inc. (NYSE: TWTR) today announced that it has entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk, for $54.20 per share in cash in a transaction valued at approximately $44 billion. Upon completion of the transaction, Twitter will become a privately held company."

https://www.prnewswire.com/news-release ... 32245.html

If so, large investors like Vanguard could keep their shares, but funds tracking total US market probably would drop the weighting to 0 thus resulting in some capital gains?
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Re: Twitter ownership

Post by firebirdparts »

harikaried wrote: Mon Apr 25, 2022 2:36 pm Sounds like Elon Musk has wanted to try to retain as many existing investors
I don't see how you got that.

"Twitter stockholders will receive $54.20 in cash for each share." That's how they do it.
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Re: Twitter ownership

Post by harikaried »

Right, that's why I said "even" with that cash purchase:
Elon Musk wrote:Will endeavor to keep as many shareholders in privatized Twitter as allowed by law
https://twitter.com/elonmusk/status/1514681422212128770

I don't really understand the mechanics of it, so not sure if it requires a step of selling the public shares to cash then buying the private shares. Or maybe it could avoid a taxable event of keeping the existing shares but now as a private company?
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Re: Twitter ownership

Post by phisher4 »

Why aren't the shares trading at $54.20, the proposed sale price? At the moment, they're trading at $51.70...

Do *that* many investors think that the deal won't close?
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Re: Twitter ownership

Post by H-Town »

harikaried wrote: Mon Apr 25, 2022 2:36 pm Sounds like Elon Musk has wanted to try to retain as many existing investors even now that "Twitter, Inc. (NYSE: TWTR) today announced that it has entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk, for $54.20 per share in cash in a transaction valued at approximately $44 billion. Upon completion of the transaction, Twitter will become a privately held company."

https://www.prnewswire.com/news-release ... 32245.html

If so, large investors like Vanguard could keep their shares, but funds tracking total US market probably would drop the weighting to 0 thus resulting in some capital gains?
I assume so. You don't have to worry about Capital Gain distribution if you hold 500 ETF (or Vanguard index funds that have ETF share class).
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Re: Twitter ownership

Post by H-Town »

phisher4 wrote: Mon Apr 25, 2022 3:34 pm Why aren't the shares trading at $54.20, the proposed sale price? At the moment, they're trading at $51.70...

Do *that* many investors think that the deal won't close?
If you hold Twitter shares, do you want to sell at $51.70 today or do you want to wait and sell it to Elon for $54.20?
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Re: Twitter ownership

Post by drk »

phisher4 wrote: Mon Apr 25, 2022 3:34 pm Why aren't the shares trading at $54.20, the proposed sale price? At the moment, they're trading at $51.70...

Do *that* many investors think that the deal won't close?
Aside from activists planning to fight the deal, why would anyone buy shares at $54.20? There are safer ways to guarantee a 0% return.

But, yeah, when the buyer is in the middle of dealing with litigation about a fake go-private deal, it's worth heavily discounting the odds. :wink:
Last edited by drk on Mon Apr 25, 2022 3:58 pm, edited 1 time in total.
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Re: Twitter ownership

Post by calwatch »

On the other hand, why not take the sure thing?
I'm reminded of when Warren Buffett bought BNSF. When Buffett announced the purchase on November 3, 2009 for $100 a share, the price spiked from $76.07 to $97. The price sort of drifted upward the next three months to $100 but that seemed commensurate to interest rates and the gradual certitude of the action. https://www.bnsf.com/about-bnsf/financi ... 5_2010.pdf

The fact that Twitter, is closing at 95% of its supposed final price as opposed to BNSF's 97% means there is a lot less certainty of Elon consummating the deal. While I think Warren Buffett is a man of his word and would have gone forward had no material issues been found, we know Elon Musk says things that often don't happen.
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Re: Twitter ownership

Post by 3CT_Paddler »

impatientInv wrote: Thu Apr 21, 2022 5:28 am Around a year ago TWTR stock was over $78 per share that is $62B+ market cap. If someone offers above that, the board will have to accept.

Elon's offer is $43B. The board is expecting higher.
And Elon’s offer was a significant premium over the current price when he made the initial offer.
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Re: Twitter ownership

Post by 3CT_Paddler »

ChesterK wrote: Thu Apr 21, 2022 5:07 am Twitter management is really horrible. They focus on building features nobody really wants, usually aping other social media companies, because they have no ideas of their own. A lot of Twitter's best and most iconic features were actually invented by its user base (such as hashtags and retweets), so it's hard to remember when a good idea last came from the company

But I really doubt Elon Musk is gonna fix Twitter. He's explicitly said he's not interested in the economics of it. For him it's about free speech. Twitter's problem isn't a lack of free speech. It's main problem is most people just don't get into it because it's hard to set up a social graph where most of the people you want to follow are not people you know IRL. Facebook's social graph can basically set itself up by recommending to you friends of friends. This is a hard problem to solve

I think what Musk's being a little naive about is how essential some level of moderation is to social networks in order to prevent them from being overridden by bots and malicious actors. Twitter is especially prone to dogpiling (whether automated or groups of people doing coordinated trolling). If Twitter could get away with no moderation they would. It's not easily automated so costs them a lot of money. Human moderators also can make mistakes, which then reflect poorly on the company. But if they got rid of this is would be much worse. It already has a reputation for being incredibly toxic. And if the platform became unusable it wouldn't help increase the value of the company.

Personally if I were that rich I don't think Twitter would be high up on my list of companies I'd want to buy. It's an iconic brand but has a lot of negative associations. Running it is painful and there's not an easy path forward to unlocking more value, which is probably why Jack Dorsey bailed.
I would say lack of transparency and lack of trust in content moderation is a pretty big deal.
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Re: Twitter ownership

Post by abuss368 »

Twitters Board accepted Elon Musk’s offer of $44 BILLION today.

Wow!
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Re: Twitter ownership

Post by jebmke »

abuss368 wrote: Mon Apr 25, 2022 7:45 pm Twitters Board accepted Elon Musk’s offer of $44 BILLION today.

Wow!
Tony
I wonder what kind of reverse termination fee is in the deal; last I heard, it wasn't clear where he was getting the cash. I suppose he had to show someone the money at some point.
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Re: Twitter ownership

Post by abuss368 »

jebmke wrote: Mon Apr 25, 2022 7:49 pm
abuss368 wrote: Mon Apr 25, 2022 7:45 pm Twitters Board accepted Elon Musk’s offer of $44 BILLION today.

Wow!
Tony
I wonder what kind of reverse termination fee is in the deal; last I heard, it wasn't clear where he was getting the cash. I suppose he had to show someone the money at some point.
I did read a cash and financing deal. I am curious what will be reported in the days ahead.

https://www.cnbc.com/2022/04/25/elon-mu ... wered.html

Best.
Tony
Last edited by abuss368 on Mon Apr 25, 2022 7:58 pm, edited 1 time in total.
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Re: Twitter ownership

Post by MindBogler »

jebmke wrote: Mon Apr 25, 2022 7:49 pm
abuss368 wrote: Mon Apr 25, 2022 7:45 pm Twitters Board accepted Elon Musk’s offer of $44 BILLION today.

Wow!
Tony
I wonder what kind of reverse termination fee is in the deal; last I heard, it wasn't clear where he was getting the cash. I suppose he had to show someone the money at some point.
"The transaction, which has been unanimously approved by the Twitter Board of Directors, is expected to close in 2022, subject to the approval of Twitter stockholders, the receipt of applicable regulatory approvals and the satisfaction of other customary closing conditions.

Mr. Musk has secured $25.5 billion of fully committed debt and margin loan financing and is providing an approximately $21.0 billion equity commitment. There are no financing conditions to the closing of the transaction.

For further information regarding all terms and conditions contained in the definitive transaction agreement, please see Twitter’s Current Report on Form 8-K, which will be filed in connection with the transaction."

Source: https://investor.twitterinc.com/financi ... d=15750773
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Re: Twitter ownership

Post by anon_investor »

What does this mean for all the Twitter stock held by total stock market index funds?
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Re: Twitter ownership

Post by SlowMovingInvestor »

H-Town wrote: Mon Apr 25, 2022 3:40 pm
phisher4 wrote: Mon Apr 25, 2022 3:34 pm Why aren't the shares trading at $54.20, the proposed sale price? At the moment, they're trading at $51.70...

Do *that* many investors think that the deal won't close?
If you hold Twitter shares, do you want to sell at $51.70 today or do you want to wait and sell it to Elon for $54.20?
There were 173M shares traded today, so people are selling it apparently.

I personally have no interest in twitter except for breaking weather events (*), but I'm not averse to picking up free coins :moneybag.

So why not buy at $51.70 today?

It's highly likely regulators approve the takeover. If one really wants to do some arbitrage, maybe buy some puts on Tesla (my thinking being that a fall in Tesla's price is one reason financing for the deal might not line up).

(*) I've found bogleheads, StackExchange, Flyertalk and reddit to be much more useful than twitter for everything except ongoing weather events. Twitter does have a good end messaging back end infrastructure and if I were in charge, I might try to find paid services that will pay for subscription or publication.
Last edited by SlowMovingInvestor on Mon Apr 25, 2022 8:26 pm, edited 1 time in total.
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Re: Twitter ownership

Post by arcticpineapplecorp. »

anon_investor wrote: Mon Apr 25, 2022 8:19 pm What does this mean for all the Twitter stock held by total stock market index funds?
wouldn't it have to be sold to Mr. Musk and no longer be a publicly traded company?
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Re: Twitter ownership

Post by SlowMovingInvestor »

anon_investor wrote: Mon Apr 25, 2022 8:19 pm What does this mean for all the Twitter stock held by total stock market index funds?
It gets converted to cash. The amount of capital gains you might receive will be insignificant. I'm sure nisprius will show us with one of his detailed and informative charts how minor a blip it would be :happy
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Re: Twitter ownership

Post by abuss368 »

anon_investor wrote: Mon Apr 25, 2022 8:19 pm What does this mean for all the Twitter stock held by total stock market index funds?
I would think it would be sold to Elon Musk. Depending on the price at purchase, it may be sold at a capital gain.

Best.
Tony
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Re: Twitter ownership

Post by alex_686 »

arcticpineapplecorp. wrote: Mon Apr 25, 2022 8:20 pm
anon_investor wrote: Mon Apr 25, 2022 8:19 pm What does this mean for all the Twitter stock held by total stock market index funds?
wouldn't it have to be sold to Mr. Musk and no longer be a publicly traded company?
Yes. He will purchase all outstanding shares. This forced sale may trigger capital gains.
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Re: Twitter ownership

Post by drk »

SlowMovingInvestor wrote: Mon Apr 25, 2022 8:22 pm It gets converted to cash. The amount of capital gains you might receive will be insignificant. I'm sure nisprius will show us with one of his detailed and informative charts how minor a blip it would be :happy
:D Already did:
nisiprius wrote: Fri Apr 15, 2022 5:53 pm Vanguard VTI

Image

iShares ITOT

Image

Twitter was 0.06% of the Vanguard Total Stock Market Index Fund on 3/31/2022.

It was 0.08% of the iShares Core S&P Total U.S. Stock Market ETF on 4/15/2022.

Do your calculations in dollars. If you own $100,000 in ITOT, you own maybe $80 in Twitter stock. A couple of shares.

Calculate your guess as to how much the capital gains are likely to be, if they need to be paid out to fund shareholders. Calculate it in actual dollars. What do you think? Ten bucks? Twenty? Thirty? So how much will you be paying in taxes? Two bucks? Five bucks? Ten bucks?

Not even considering what the ETF managers can or cannot do.

Enjoy the drama of news stories about individual stocks, but don't assume it matters much to you without doing the math on how much of the stock you actually own yourself.
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Re: Twitter ownership

Post by SlowMovingInvestor »

Oh, and one more thing -- entirely possible ETFs could use heartbeat trades to wash away twitter capital gains (even if tiny).

Since VG ETFs are only a share class of VGs funds, even VGs funds might not take a capital gain hit (although as mentioned above, the hit would be very small).


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Re: Twitter ownership

Post by anon_investor »

alex_686 wrote: Mon Apr 25, 2022 8:25 pm
arcticpineapplecorp. wrote: Mon Apr 25, 2022 8:20 pm
anon_investor wrote: Mon Apr 25, 2022 8:19 pm What does this mean for all the Twitter stock held by total stock market index funds?
wouldn't it have to be sold to Mr. Musk and no longer be a publicly traded company?
Yes. He will purchase all outstanding shares. This forced sale may trigger capital gains.
What about for individual holders of Twitter stock, do they just get cashed out as well?
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Re: Twitter ownership

Post by SlowMovingInvestor »

anon_investor wrote: Mon Apr 25, 2022 8:38 pm What about for individual holders of Twitter stock, do they just get cashed out as well?
Yup, which is why I was wondering why one shouldn't just buy Twitter at $51.70 and wait for the deal to close.
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