Bluesky funding will be reviewed if Twitter’s owners change: Jack Dorsey

Funding for the Bluesky initiative would need to be reassessed if ownership of Twitter Inc. change, Jack Dorsey, founder of the social media company, said in the tweet.

Funding for the Bluesky initiative would need to be reassessed if ownership of Twitter Inc. change, Jack Dorsey, founder of the social media company, said in the tweet.

“Twitter doesn’t own this,” Dorsey wrote in response to a comment about Bluesky. Still, “the funding would need to be reassessed.”

Progress on Bluesky has been slow, he said. The initiative aims to develop a protocol to allow the interaction of various social networks.

Elon Musk earlier this week launched a $43 billion hostile takeover bid for Twitter. The company responded by adopting a clause called the “poison pill” to help fend off the proposal.

Elon Musk’s move to buy Twitter faces obstacles

(AFP) Even for the richest person on the planet, buying Twitter would always be a challenge – a highly complex financial transaction now further complicated by a defensive “poison pill” action by the platform’s board.

Musk’s $43 billion offer presents numerous potential pitfalls: potential government approvals, legal and regulatory due diligence, final settlement negotiations and, of course, how to pay for everything.

So Twitter’s board on Friday showed it won’t be quiet, saying that any acquisition of more than 15 percent of the company’s stock without its OK would trigger a plan to flood the market with shares and thus make a purchase much more difficult.

“Your move @elonmusk,” tweeted Silicon Valley journalist Kara Swisher.

The offer itself, which Musk said was final, values ​​Twitter at $54.20 a share — above the closing price before his offer but below the $77.06 high it hit in February last year.

Even with a moderate and uncompromising proposal, which could help the board argue for rejection, it’s a tense moment that could end in lawsuits from nearly everyone involved.

To succeed in repelling Musk’s offer, Twitter’s board will need to be on solid ground, arguing that the company is worth more, said Wharton School finance professor Kevin Kaiser.

Shareholders who feel the board is rejecting a lucrative deal will be free to file lawsuits against Twitter.

– Dodge the board? –

Musk has the option of evading the board and trying to buy shares directly from shareholders in the market, but that could lead to tedious negotiations with some stockholders wanting more money.

“Twitter’s board has limited ability under Delaware law to prevent a takeover bid made directly to shareholders, which Elon Musk did not do, but which he could do if he wanted to,” Kaiser said.

“If he does that, and if the shareholders choose to offer their shares, he can succeed without needing the support or approval of the board.”

Although the serial entrepreneur’s net worth is estimated at $265 billion by Forbes, his fortune is not in a bank account waiting to be spent.

Musk told a TED conference he had “sufficient funds” to consummate the deal, but financial analysts describe the situation as more complicated.

Much of Musk’s wealth comes from shares in electric car maker Tesla, which he manages.

Musk would need to turn some of his stake in Tesla into cash, either by selling stock or borrowing with stock as collateral.

“The specifics of how Musk would fund the deal will determine the ramifications for Twitter,” Moody’s said in a note to investors.

Moody’s estimated that it would cost Musk $39 billion to buy all of Twitter’s outstanding shares, and that there was “a strong chance” that he could pay off or refinance the San Francisco-based company’s billions of dollars of existing debt.

This was before Twitter’s poison pill move that increases the cost to Musk.

Musk tweeted research that hinted he might be considering taking his offer directly to shareholders.

He asked whether taking the company private at the price offered should be a shareholder decision and not a board decision.

As the poll drew to a close on Friday, more than 2.7 million votes were cast, with nearly 84% of them in favor of the idea.

Selling a large amount of Tesla shares to buy Twitter would entail a large capital gains tax collection and could cause the electric car company’s shares to plummet as the market is flooded with shares for sale. .

Musk could keep his stock and get a loan, absorbing interest payments. Or he can team up with a pocket partner, but that can happen with the strong-willed executive having someone to answer to about his decisions on Twitter.

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