[jalonso510]

This is not correct. The board negotiated a deal with Elon after putting the poison pill into effect. If Elon had made a deal directly with the stockholders, that would have triggered the poison pill. He surely spoke with and lobbied the stockholders for support, but the deal he agreed to was approved by the board.

[qiskit]

> The board negotiated a deal with Elon after putting the poison pill into effect.

There was no "negotiation" with the board. Elon just made an unsolicited offer and said take it or leave it. The board "left it" and yet here we are.

> If Elon had made a deal directly with the stockholders, that would have triggered the poison pill.

What? That's not how poison pills work. Poison pills exist to prevent hostile takeovers. It isn't there to prevent someone from talking to the stockholders. If the stockholders agree to the deal, it is no longer a hostile takeover.

> He surely spoke with and lobbied the stockholders for support, but the deal he agreed to was approved by the board.

Yes. The deal was first rejected by the board. And then the deal was approved by the board. Why do you think that was? What made the board change their minds? I wonder. You might have a point if elon raised his offer from $54.20 to a much higher number. But all reporting indicates he didn't change his offer.

Of course the deal was approved by the board. My point is that the shareholders made them approve the deal.

[dahfizz]

> The deal was first rejected by the board. And then the deal was approved by the board.

Source?? The deal was never rejected by the board. Instituting a poison pill was not a rejection. Twitter made it clear with the poison pill anouncement that they had not decided on Musks offer yet.

> The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders,” the company said in a press release.

> Twitter noted that the rights plan would not prevent the board from accepting an acquisition offer if the board deems it in the best interests of the company and its shareholders.

https://www.cnbc.com/2022/04/15/twitter-board-adopts-poison-...

[dogecoinbase]

I know it's a big ask, but it would be kind of nice if HN added a flag context situation so one could flag a comment as "has literally no idea about how corporations work" rather than just a generic flag.

[tempnow987]

Um, I'm afraid you might be the one getting flagged :)

Shareholder pressure, which was rumored to include governors and ag's in states with pension investments in twitter who don't like twitter, was out there.

They risked a decline of twitter's stock price if Elon withdrew his offer AND sold his (largish) block of shares AND announced a competing service with some of his billions.

Twitter has its HQ in SF, but that doesn't mean it can blow florida pension money because they don't like musk.

So yes, the board, taking into consideration shareholders and their duty there, may have been in a tough spot. It certainly doesn't seem like they got any increase in price.

[potsandpans]

as someone with limited understanding of how corporations work, i had a hard time understanding who was factually correct in the exchange.

[dogecoinbase]

So, as a rough, the board determines what happens, and the shareholders can notionally replace the board. The board _can_ listen to the shareholders, but are by no means obligated to and in the case of Twitter in particular, the board elections happen on a staggered rotating basis so even a majority shareholder could not immediately replace enough of the board to obtain a majority.

[tempnow987]

This is totally false. The board owes a fiduciary duty to shareholders. It is almost certain that if they imploded the deal for political reasons that places like florida would have sued.

You really don't know how this works.

https://www.youtube.com/watch?v=98EzC_1GvGE

There have been tons of cases about this, where boards ignore rights of shareholders or those with minority interests.

[dogecoinbase]

The fiduciary duty exceeds expressed shareholder preferences -- if the board believes that a particular action is not likely to improve value, they don't have to do it, even if all their shareholders tell them to (though, of course, they might be likely to be voted out in the next election for same).

[bigiain]

> but the deal he agreed to was approved by the board.

Yeah, probably as qiskit suggested, because the major shareholders told the board to pull their heads in and take the money.

[dundarious]

Given the context of this discussion is a question about why the poison pill didn’t prevent this bid from succeeding, I think it doesn’t matter whether the board accepted because of negotiations with Musk (willingly) or because of shareholder pressure (through gritted teeth). The point is, the board approved the deal so the poison pill didn’t trigger. If they rejected the deal, the poison pill would still be a factor.

At least that’s my understanding.

[farmerstan]

Lol this is completely wrong.