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Former Twitter CEO Jack Dorsey Rips Twitter’s Board As Elon Musk Tries To Buy Company

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OPINION: This article may contain commentary which reflects the author's opinion.


Jack Dorsey, the co-founder of Twitter and former CEO, is sounding off on the company’s board of directors amid Elon Musk’s attempts to purchase the company.

Dorsey made some interesting comments on Twitter in response to the company’s board of directors attempting to block Musk after he offered $43 billion to buy the company outright.

“If look into the history of Twitter board, it’s intriguing as I was a witness on its early beginnings, mired in plots and coups, and particularly amongst Twitter’s founding members. I wish if it could be made into a Hollywood thriller one day,” a Twitter user tweeted in response to a thread between Dorsey and others.

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Dorsey responded, “It’s consistently been the dysfunction of the company.”

Dorsey also said “big facts” in response to the following statement from venture capitalist Fred Destin: “What I do know for sure is that this old Silicon Valley proverb is grounded in age-old wisdom that still applies today: Good boards don’t create good companies, but a bad board will kill a company every time.”

When another user asked if he was allowed to speak about the board the way he had been, Dorsey responded, “no.”

Twitter is trying to block Musk from purchasing the company by adopting a so-called “poison pill,” which would allow shareholders, except those trying to buy out the company, to purchase newly offered shares at a discounted price.

This could also allow Musk to purchase new shares but at a much higher price, which may be more than he’s interested in spending since he already purchased 73.5 million shares worth $2.9 billion.

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It was reported on Monday that Musk has spoken with other investors about joining his bid to purchase Twitter. This comes a week after he formally offered last week to completely buy Twitter for just over $40 billion.

“One possibility, the sources said: teaming with private-equity firm Silver Lake Partners, which was planning to co-invest with him in 2018 when he was considering taking Tesla private. Silver Lake’s Co-CEO Egon Durban is a Twitter board member and led Musk’s deal team during the 2018 failed effort to take Tesla private, sources said. Silver Lake declined to comment,” the New York Post reported.

“For its part, Twitter on Friday adopted a so-called poison pill — a corporate move that prevents Musk from acquiring more than 15% of the company. But that pill may not stop other entities or people from acquiring their own shares of up to 15% of the company. Those owners could partner with Musk to force a sale, make changes in the executive ranks or push for other overhauls of the company,” the report added.

“This is not over,” a source told the New York Post.

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A report from Business Insider details how Musk has three viable options moving forward.

“Now that Twitter has adopted a poison pill to prevent a hostile takeover of the company, Elon Musk has three pathways forward, according to a Monday note from Wedbush. Musk made an unsolicited bid for Twitter at $54.20 per share last week, representing a total market valuation of about $43 billion. That was after he acquired more than 9% of the company and toyed with the idea of joining the company’s board of directors,” the report began.

“But since Twitter adopted a poison pill, Musk tweeted “Love me tender,” hinting at the possibility of a tender offer to take over the company and sidestep the adopted poison pill. According to Wedbush analyst Dan Ives, he can now formally lay out his financing strategy, which would likely include taking on debt with his Tesla and SpaceX stakes as collateral, as well as a vision for the social media company going forward. That vision could entice investors who have seen virtually no return in the stock since it went public,” the report stated.

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A second path for Musk would be to find a strategic partner for the bid and increase it to about $60 per share, “which seems to be a more appropriate level in the eyes of many Twitter shareholders that could get the deal over the goal line,” according to Ives.

“The third option would be for Musk to hit the sell button and exit his position which we view as unlikely (at this point),” Ives said. But all of these pathways could change if a separate interested party steps into the takeover of Twitter.

“In a nutshell, this week is very important for all the parties involved in this Twitter soap opera with time to get out the popcorn,” he concluded.

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