The ongoing saga between Elon Musk, Twitter, and Twitter continues. According to Friday’s letter, 18 Republican members of Congress have requested that Twitter’s board be preserved all records relating to Musk’s hostile takeover.
Although the formal request by the minority Republicans isn’t legally binding, it could be used to open an investigation if the Republicans win the House majority in the midterm elections.
Show of hands — who’d shell out some serious cash to watch the Twitter board of directors testify under oath before a Republican-controlled House Judiciary Committee? Awesome. Make sure to eat lots of popcorn.
The Repubs requested that the Twitter Board Chairman Bret TAY, who was first shared with CNBC in letters, preserve all messages of board members from personal or official accounts. This included encryption software pertaining to Twitter’s “consideration” — the desperate fight against — Musk’s hostile takeover bid.
In one of the letters, Jim Jordan (R.I.P.) addressed the official request to Bret Taylor, Twitter Board Chair.
This letter is being sent to Congress to request the preservation of all documents and materials related to Musk’s offer for Twitter to buy. It also includes Twitter’s response and consideration, as well as its evaluation of shareholders’ interests in relation to Musk’s offer.
Jordan was referring specifically to corporate boards’ “fiduciary obligations”, which they owe exclusively to shareholders (including minority shareholders) and are also accountable solely to shareholders.
The letter continued:
This preservation notice should be interpreted as an instruction to take all reasonable measures to prevent the destruction, alteration, or negligence, of any documents, communications, or other information, electronic information, or metadata that may be responsive to this congressional inquiry.
We reported that while Twitter has yet to respond to Musk’s offer, it announced last week a “poison pills” strategy. It would activate if Musk, who holds more than nine percent, crosses a threshold of 15%. It would enable other Twitter shareholders to purchase additional stock at a significant discount. Stocks would then trade at twice the price of their original sale price. The flood of shares that Musk would receive from the sale of his stock would theoretically dilute Musk’s share. This is all to make ownership prohibitively costly.
The letter also mentioned the fiduciary responsibilities as mentioned in the previous paragraph.
Twitter’s Board members have fiduciary responsibilities to shareholders. These duties are applicable despite the fact that many corporate leaders pursue progressive policies unrelated to shareholder interests.
Bottom line: The plot thickens. Elon Musk is Elon.
Musk isn’t the most successful person on the planet because he feigns weakness. He’s also not working with a similarly-skilled corporate colleague. Musk, on the other hand, seems to play with the Twitter board at times, much like a hamster playing on its wheel.
Elon Musk will decide whether he acquires Twitter, regardless of whether the Twitter board follows the House Republicans’ request to preserve the correspondence.