Question
2.1 About 14 April 2022, two things happened. Firstly, Twitters board announced a flip-in poison pill to take effect if Elon Musk (or any other
2.1 |
About 14 April 2022, two things happened. Firstly, Twitters board announced a flip-in poison pill to take effect if Elon Musk (or any other investor) tried to purchase more than 15% of Twitters shares without the boards approval. Secondly, Elon Musk announced an offer to buy all Twitter shares at $54.20 each.
How did Twitters share price and trading volume react to this news of 14 April 2022? Calculate the percentage change (if any) and explain possible reason(s) for any observed changes. |
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2.2 | Explain what a flip-in poison pill is, when it should be used, what it is intended to achieve, and critically discuss if it was the right decision at the right time by Twitters board. |
2.3 | How much of a premium above the trading value of Twitters shares was Musks offer of $54.20 per share? Why is it usual in such circumstances to offer a price higher than the trading value? |
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