Twitter said Friday that its board of directors has unanimously adopted a “poison pill” defence in response to Tesla CEO Elon Musk’s proposal to buy the company for more than $43 billion US and take it private.
The move would allow existing Twitter shareholders — except for Musk — to buy additional shares at a discount, thereby diluting Musk’s stake in the company and making it harder for him to corral a majority of shareholder votes in favour of the acquisition.
Twitter’s plan would take effect if Musk’s roughly nine per cent stake grows to 15 per cent or more.
The poison pill injects another twist into a melodrama surrounding the possibility of the world’s richest person taking over a social media platform he described Thursday as the world’s “de facto town square.”
Twitter said its plan would reduce the likelihood that any one person can gain control of the company without either paying shareholders a premium or giving the board more time to evaluate an offer. Such defences, formally called shareholder rights plans, are used to prevent the hostile takeover of a corporation by making any acquisition prohibitively expensive for the bidder.
Even if it discourages his takeover attempt, Musk could still take over the company by waging a “proxy fight” in which shareholders vote to retain or dismiss the company’s current directors. Twitter said its plan doesn’t prevent the board from negotiating or accepting an acquisition proposal if it’s in the company’s best interests.
“They’re gearing up for a battle here with Musk,” said Daniel Ives, an analyst for Wedbush Securities. “They also have to give themselves time to try to find another potential buyer.”
Musk has offered to buy the company outright for more than $43 billion US, saying it “needs to be transformed as a private company” in order to build trust with its users and do better at serving what he calls the “societal imperative” of free speech.
“Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization,” he said during an onstage interview at the 2022 TED conference Thursday in Vancouver, just hours after his bid was announced.
With about 82 million Twitter followers, Musk is both a prolific user of the platform and a vocal critic of the measures it has taken to restrict accounts that spread misinformation or amplify violent rhetoric and hate speech. He said Thursday he’s opposed to permanent user bans — the most famous of which is Twitter’s suspension of former President Donald Trump’s account after the Jan. 6 Capitol riot.
Musk revealed in recent regulatory filings that he’d been buying Twitter shares in almost daily batches starting Jan. 31, ending up with a stake of about nine per cent. Only Vanguard Group controls more Twitter shares. A lawsuit filed Tuesday in New York federal court alleged that Musk illegally delayed disclosing his stake in the social media company so he could buy more shares at lower prices.
After Musk announced his stake, Twitter quickly offered him a seat on its board on the condition that he would limit his purchases to no more than 14.9 per cent of the company’s outstanding stock. But the company said five days later that Musk had declined.
Ives said Twitter’s poison pill path is a predictable defensive maneuver but could be seen as a “sign of weakness” for the company on Wall Street.
Musk could try to fight the measure in court, but “no court has overturned a poison pill in the last 30 years,” said Columbia University law professor John Coffee. Rallying shareholders to kick out the board might be more doable but also presents challenges to Musk, Coffee said.
Resistance to Musk’s offer
Musk’s offer already faced resistance before Twitter threw its Friday counterpunch.
A Saudi prince who is among Twitter’s major shareholders scoffed at Musk’s offer in a Thursday tweet. Al Waleed bin Talal said he would reject Musk’s overtures because he didn’t believe $43 billion US “comes close to the intrinsic value of Twitter, given its growth prospects.” The prince punctuated the tweet with another one from 2015 disclosing his Kingdom Company had raised its stake in Twitter to 5.2 per cent — about half of what Musk now holds.
While Musk’s $54.20 US per-share offer is nearly 40 per cent greater than Twitter’s stock price before he disclosed his huge investment, it’s still far below the peak closing price of $77.63 US reached less than 14 months ago. At that time, Twitter was valued at about $62 billion US.
Musk responded to the prince with a tweet asking how many Twitter shares he holds and then made what may have been a veiled reference to the 2018 murder of journalist Jamal Khashoggi that was tied to Saudi Arabia’s Crown Prince Mohammed bin Salman. “What are the Kingdom’s views on journalistic freedom of speech?” Musk asked in a Thursday tweet.
In a sign that investors are skeptical about Musk’s offer, Twitter’s stock fell in the first day of trading after the takeover bid was announced Thursday — exactly the opposite of what an approving market reaction looks like. The stock markets were closed Friday for the Good Friday holiday. Twitter said it plans to disclose more details of its shareholder plan in an upcoming regulatory filing.
Another outspoken billionaire, Dallas Mavericks owner and tech investor Mark Cuban, weighed in on Twitter to share his theory that Musk is making his bid to goose the company’s stock price so he can sell his stake at a profit. Using a profane term, Cuban also postulated Musk is using the bid to torment the U.S. Securities and Exchange Commission, the stock market regulatory agency that fined Musk $20 million US in 2018 after he tweeted about a potential buyout of Tesla that never materialized.
In Thursday’s TED event, Musk made it clear he is still incensed with the SEC and cursed the regulators with a profanity.
US stocks rally as Fed minutes meet expectations – Al Jazeera English
Investors fear that overly aggressive interest rate hikes by the Fed could tip the economy into recession.
Wall Street closed higher Wednesday, boosted after minutes from the Federal Reserve’s latest monetary policy meeting showed policymakers unanimously felt the United States economy was very strong as they grappled with reining in inflation without triggering a recession.
The minutes from the Federal Open Market Committee’s May meeting, which culminated in a 50-basis-point rise in the Fed funds target rate – the biggest jump in 22 years – showed most of the committee’s members judged that further such rate hikes would “likely be appropriate” at its upcoming June and July meetings.
“The uniformity of opinion is a good thing,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. “There’s a lack of uncertainty of what needs to be done in the near term.”
“By the time [the Fed] gets to September, they will have plenty of economic data to make their move from there, so they continue to maintain optionality,” Mayfield added.
All three major US stock indexes gyrated earlier in the day amid increasing jitters stemming from business and consumer surveys, economic data and corporate earnings reports suggesting a cooling American economy – even as the Fed prepares to toss a bucket of cold water on it to tackle decades-high inflation.
Fears that overly aggressive interest rate hikes by the Fed could tip the economy into recession despite evidence that inflation peaked in March has driven those concerns.
“There’s some credence to the idea that inflation is doing [the Fed’s] job for them,” Mayfield said. “There’s already a cooling occurring, and financial conditions have tightened over the last month because of dollar strength and equity market weakness.”
On Thursday, the Department of Commerce is due to release its second take on first-quarter GDP, which analysts are expected to show a slightly shallower contraction than the 1.4 percent quarterly annualised drop originally reported.
The Personal Consumption Expenditures report will follow on Friday, which will provide further clues regarding consumer spending and whether inflation peaked in March, as other indicators have suggested.
The Dow Jones Industrial Average rose 191.66 points, or 0.6 percent, to 32,120.28, the S&P 500 gained 37.25 points, or 0.95 percent, to 3,978.73 and the Nasdaq Composite added 170.29 points, or 1.51 percent, to 11,434.74.
Nine of the 11 major sectors in the S&P 500 rose, with consumer discretionary stocks leading the pack with a gain of 2.8 percent.
Amazon.com Inc and Tesla Inc provided the strongest lift to the S&P 500 and the Nasdaq, rising 2.6 percent and 4.9 percent, respectively.
Department store operator Nordstrom Inc surged 14.0 percent on the heels of its upbeat annual profit and revenue forecasts.
Fast-food chain Wendy’s Co jumped 9.8 percent after a regulatory filing revealed that shareholder Nelson Peltz was considering a potential takeover bid for the company.
Shares of Nvidia Corp fell more than 8 percent in after-hours trading after the company’s second-quarter revenue forecast missed expectations.
Gas Up Nearly 4 Cents; Price Freeze Lifts in Labrador – VOCM
Despite predictions to the contrary, the regulated price of gas is up in most parts of the province.
Gasoline is up by 3.9 cents a litre, except along the coast of Labrador. Diesel on the island is up by 1.3 cents while diesel in Labrador has dropped by 11.6 cents a litre. Furnace oil costs over a cent a litre more on the island while stove oil on the island up by the same amount. Stove oil in Labrador is down by 23.70 cents a litre.
Propane meanwhile is down by just under 2 cents.
The suspension of maximum price adjustments on the coast of Labrador lifts as of today as fuel deliveries resume for the season—that means significant increases, in some cases by about a dollar a litre, for some fuels.
Cheese not on the table in Canada-U.K. trade talks as Britain seeks market access
OTTAWA — The British foreign secretary has often been mocked for her preoccupation with cheese. It started eight years ago when Liz Truss expressed outrage in a speech to her party’s annual conference.
“We import two thirds of our cheese,” she raged. “That is a disgrace.”
Now Truss is facing another battle over cheese, this time with Canada.
Britain wants greater access to Canadian markets for more than 700 varieties of cheese including Stilton, Cheshire, and Wensleydale, a crumbly variety originating from Yorkshire.
But Ottawa has made it clear it does not want to see more British cheddar, let alone artisan varieties such as stinking bishop, renegade monk and Hereford hop, on Canadian fridge shelves.
During the first round of negotiations of the U.K.-Canada trade deal, Canada told Britain that a larger quota for British cheese is not on the negotiating table.
When it was a European Union member, Britain was part of the Comprehensive Economic and Trade Agreement with Canada, giving it some access to Canada’s cheese market.
After the U.K. left the EU, a “continuity agreement” with Canada was swiftly put in place to maintain the CETA arrangement until a bilateral trade deal could be struck.
Ralph Goodale, Canada’s high commissioner to the U.K., said if Britain wants more access to Canadian markets for its cheese as part of a bilateral free-trade agreement, it will have to knock on Brussels’ door and get its part of the dairy quota back.
“The point is we have already provided that volume in the EU deal and the British left it there without taking it with them,” he said in an interview. “That’s an issue they need to resolve with the Europeans because the Europeans have their quota.”
Goodale said the U.K.’s request for extra access for British cheese — on top of the access given to the EU — is “what the Canadian negotiators consider to be pretty much a dead end.”
“You are talking about a double concession — one we have already made to the EU and the request is being made by the U.K. for yet another one on top of that,” he said.
The high commissioner said Canada values its trading relationship with the U.K., adding that he is confident that a mutually-beneficial trade deal will be reached.
But if Canada allows the British to export more of their cheese it would involve “a major commitment of compensation to dairy producers” in Canada to make up for lost incomes.
In 2018, after the United States-Mexico-Canada Agreement gave the U.S. fresh access to the Canadian dairy market, Prime Minister Justin Trudeau said he would compensate Canadian dairy farmers.
Canada’s dairy industry was worth over $7 billion in 2020, according to the Canadian Dairy Commission’s annual report.
There are over 10,000 dairy farms in Canada — most of them in Quebec and Ontario — with an average of 92 cows per farm, it said.
Until at least the end of next year, Britain will be able to keep exporting its cheese to Canada under the trade continuity agreement, the U.K.’s trade department said.
This allows U.K. cheese exporters to access the Canadian market tariff-free under the EU portion of Canada’s World Trade Organization cheese tariff rate quota.
As part of the 1995 WTO agreement on agriculture, Canada established tariff rate quotas for cheese and other dairy products. The quotas set out quantities of dairy that could enter Canada with little or no duty.
For Britain, a fully fledged free trade deal with Canada is crucial after Brexit left it looking for fresh tariff-free markets.
“We want to negotiate an ambitious and comprehensive new agreement with Canada that will strengthen our close and historic bilateral trade relationship,” said a U.K. government trade spokesman in a statement, adding the relationship was worth about $34.5 billion in 2021.
In March, U.K. Trade Secretary Anne-Marie Trevelyan flew to Canada to announce with Canada’s Trade Minister Mary Ng that bilateral negotiations had officially begun.
In a speech in the House of Lords in London earlier this month, Goodale reported on progress in the talks, saying that “both sides are optimistic that, as good as CETA and the continuity agreement were, we can do better still when Canada and the U.K. negotiate a deal face-to-face, directly with each other.”
Like Goodale, Ng said Canada is confident a free-trade deal with Britain will be reached, enhancing co-operation in a number of areas, including on renewables, sustainability and the digital economy.
“Canada values the relationship with the United Kingdom. They are … an important trading partner and a trade agreement with the U.K. will be very good for Canadian businesses,” she said in a phone interview from Thailand last weekend.
But she was also firm about the need to protect Canada’s dairy producers, and that means keeping more British cheese out.
“I have been very clear, our government has been very clear, that we will not provide access to our supply-managed sector,” she said. “We have been clear about that from the get-go.”
The Canadian dairy sector now produces 1,450 varieties of cheese, including ewe, goat and buffalo varieties, as well as the cheese curds used in the Québécois dish poutine.
At least half of Canada’s cheese is made in Quebec, which is home to a number of artisan varieties including bleu l’ermite, or blue hermit, and Oka, a popular semi-soft rind cheese.
Pierre Lampron, president of the Dairy Farmers of Canada, has made it clear he will fiercely protect Canadian cheese from British interlopers.
Lampron said he had “validated that the issue of access to the Canadian dairy market was not on the agenda of these trade talks.”
Canada’s protectionist stance toward its dairy industry may have pleased farmers. But it has caused some tension with close allies.
Earlier this month, New Zealand launched a formal trade dispute against Canada, accusing the federal government of breaking promises to give access for dairy imports under the Trans-Pacific Partnership agreement.
The Biden administration also recently said it was asking for a second dispute settlement panel under the U.S.-Mexico-Canada Agreement to review a trade dispute with Canada over dairy import quotas.
This report by The Canadian Press was first published May 26, 2022.
Marie Woolf, The Canadian Press
Canada’s transport minister detects ‘shift’ in U.S. outlook after meetings in D.C.
With debates over, Conservative leadership candidate turns to final membership push
‘Extremely serious’: Calgary man involved in terrorism activity sentenced to 12 years
Silver investment demand jumped 12% in 2019
Europe kicks off vaccination programs | All media content | DW | 27.12.2020 – Deutsche Welle
Global Media Markets, 2015-2020, 2020-2025F, 2030F – TV and Radio Broadcasting, Film and Music, Information Services, Web Content, Search Portals And Social Media, Print Media, & Cable – GlobeNewswire
News20 hours ago
Malema: France should leave Africa alone
Health19 hours ago
Monkeypox: Cases in Canada climb to 16, PHAC says – CTV News
News5 hours ago
The Gender War amongst Us
Science19 hours ago
Boeing capsule returns from space station after test flight with no crew – CBC News
News16 hours ago
UK’s Kendal Nutricare to deliver 2 million cans of baby formula to the US by June
Art19 hours ago
'Deaf Shame to Deaf Same': Art exhibit aims to destigmatize hearing loss – CTV News Regina
News18 hours ago
Trudeau cancels appearance at Surrey fundraiser over protest-related safety concerns – CBC.ca
Science18 hours ago
Crumbling comet could create meteor shower May 30 – Toronto Sun