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I am skeptical that

Elon Musk will actually be able to get Twitter in a hostile takeover. Oh, I dearly hope so, and I would join Twitter that same day. I just suspect that it will not actually happen. May I be wrong!

But “Plan B” is also a pretty good option. If I were a billionaire (oh, how I wish!) I would be more than happy to join Elon in this.

This option (that they used to use for whaling ships) is that a bunch of people all get together and pool their resources and then divide any profits as well as share the risks to the ship based on the percentage that they risked. You buy only a proportion of that ship–so you spread the risk. I mean, one person couldn’t buy the whole ship PLUS bear all the risks by himself, so costs and benefits were spread out across several investors.

You join the deal, and then hope that your ship actually makes in back into home port. You think, “One day my ship will come in.”

So the “boss” of that ship, of course, has a legal duty to not take unnecessary risks and to maximize the returns and minimize the losses for those who bought in.

It was called an “Incorporation…”

BUT, I think the board of Twitter is in a bind: See, they have a legal fiduciary duty toward the stock-holders. And Musk has made an offer that is financially good for those stock-holders.

So if the Twitter board rejects the offer, they face legal liability potentially from each individual stock-holder for doing something that is not good for them. Then they would face lawsuit after lawsuit for deliberately failing in their fiduciary duty.

Plus, I would predict that the value of Twitter stack sinks like a stone if the board rejects the offer, even further opening themselves up to charges of breach of fiduciary duty. And stock-holders would rightly be, if not disgruntled, not exactly gruntled (thanks, P.G. Wodehouse!).

But if they accept, Twitter becomes a place for free speech, and the board just can’t tolerate that!

So the board is indeed between a rock and a hard place…

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