[marinmania]

OP mentions the lawsuits did not succeed

Its not like the courts are investment banks with an evaluation arm. They are just judging if anything reaches the point where shareholders were legally harmed, which still gives a lot of gray area to the acquiring company.

[rayiner]

Lawsuits can fail for lots of reasons without a decision on the merits. It seems relevant that the reason the lawsuit failed is because the court looked at the fairness of the transaction and determined that Tesla paid a fair price.

[nmca]

This whole thread is true consistent statements that differ only in emphasis.

[lcnPylGDnU4H9OF]

> differ only in emphasis

The commenter you are responding to is explicitly intending to place more emphasis on the reason why the lawsuit failed. That is why they used the phrase “burying the lede” in their initial comment.

[srveale]

True!

[glenstein]

Hold on, I feel like everyone's missing that theres a real argument here. I think the key point was:

>They are just judging if anything reaches the point where shareholders were legally harmed, which still gives a lot of gray area to the acquiring company.

This distinguishes the lawsuit failing from the idea that a fair price was paid. The competing contentions are (a) fair price vs (b) unfair but beneath threshold of legally punishable harm.

[rayiner]

Note that this is a civil suit, so the concept of a “threshold of legally punishable harm” doesn’t apply. There’s no “punishment,” and the plaintiff doesn’t need to meet the high standards (proof beyond a reasonable doubt, etc.) for imposing a punishment.

Under Delaware law, there’s two standards for evaluating this kind of claim. When there is no conflict of interest, the court applies the “business judgment rule,” which is similar to what you seem to be thinking—it gives corporate officers wide latitude.

But when there is a conflict of interest, the court applies the “entire fairness” standard, which requires both fair dealing and a fair price. And a fair price means what it sounds like—it’s what an objective businessman would consider a fair price under the circumstances. It doesn’t need to be the best price, but it must be within the range of fair. And to establish a fair price, the court relies on evidence from financial valuation experts. It’s a rigorous standard that’s hard to meet.

[michaelmrose]

(c) no fair price can possibly be determined but the burden of proof lies with the claimant

(d) a court has no idea what a fair price would look like but made a finding of fact based on expert testimony despite being poorly situated to evaluate it

[SilasX]

That’s generous. One party is stubbornly missing that the Delaware court’s ruling is weak evidence of a proper valuation having been done, but wants to parrot an irrelevant textbook understanding that obfuscates that conclusion.

[DannyBee]

It's worth pointing out (IMHO) given the other comments that it's actually more than that - the fairness standard requires they prove the process was fair as well (IE a fair process that generated a fair price), which the court found they did as well.

(As you know, but others may not - this is not always the standard vs the business judgment rule, but is the standard here)

[facile3232]

shareholder value maximization, shareholder value maximization über alles

I just wanna know where we can find these shareholders and evict them from earth because they're destroying everything.

[psd1]

Sadly, my pension

I have no holdings in armaments or instruments of torture, apparently. But that's about the most constraint I can apply, short of self-managing.

[facile3232]

Easily-replaceable with the correctly shaped welfare-state, never fear!

[psd1]

You joke, I think, but I do think a solid welfare state delivers benefits that a mainstream economist would recognise. I fancy the long-term prospects if a country with a safety net higher than one without, all other things being equal. I see more inherent value in the public sector than the private.

Unfortunately the private sector has dominated the zeitgeist for decades; a kind of meta-regulatory-capture, if you will.

I can't trust that there will be a state pension waiting for me. So I'm in the private sector. Got some bonds in my mix, at least.

[cyberge99]

Reduced crime is the most obvious. People will eat. Wether they have to steal it or get it via a social safety net is up to society.

[jjk166]

Those tend to invest in armaments and instruments of torture though