The board of Twitter (TWTR) is doing a terrible job dealing with the Elon Musk situation, said former SEC Chairman Harvey Pitt.
“I would give Twitter’s board of directors a 5,” Pitt said on Yahoo Finance Live. “I think under the circumstances they had to check if this was a genuine offer. If it was a genuine offer, then they had to do what was in the best interests of their shareholders. This is an award that had not been given. The number is at least a legitimate frame of reference and the board’s unwillingness to take it seriously strikes me as worthy of a bad mark.”
The Tesla CEO, who owns a 9.2% stake in Twitter, offered to buy the social media platform for $54.20 a share last week. Musk believes the platform should rely less on ad sales and monitor its content better, among other early ideas from the unpredictable visionary.
As you might expect, Twitter barely welcomed Musk’s arrival.
FILE – The logo for Twitter appears over a trading post on the floor of the New York Stock Exchange on Monday, November 29, 2021. Elon Musk is acquiring a 9.2% stake in Twitter. According to a regulatory filing, Musk bought about 73.5 million shares. (AP Photo/Richard Drew, file)
Shortly after Musk’s offer, Twitter said that it, along with its board of directors, “will carefully review the proposal to determine what course of action it believes is in the best interests of the company and all Twitter shareholders.”
Twitter has since rolled out a poison pill to keep Musk from acquiring more of the company.
“We believe the recent development is a major distraction, if anything, for Twitter’s management team and casts doubt on Twitter’s ability to meet its aggressive FY23 mDAU and revenue guidance (315 million mDAUs in Q4′ 23 and $7.5 billion plus revenue in full year 2023), which we’re generally cautious about,” warned Deutsche Bank analyst Benjamin Black.
Brian Soci is a freelance editor and Anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and further LinkedIn.
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