Companies buy and sell other companies on a regular basis and there are law firms and divisions of every securities company called mergers and acquisitions. Given the number that are done, they fall into normal patterns and one of the normal aspects is what happens if the deal falls apart? Similar to many aspects at The Board level, money is very important or companies agree if the deal does not go through a dollar amount is paid. When the deal is expected the companies tend to agree on a higher figure to show they are serious. If the deal does not go through, legal talent exchange views in court how the number should be lower.
Elon Musk wants to but Twitter, as one of the wealthiest people on the planet, he can. Elon Musk has demonstrated he was one of the more interesting people, but he seems to believe the rules do not apply to him. The Board of Twitter wants the $ 1 billion, Elon said he would pay if the deal did not go through. Elon says Twitter has more problems than I thought it had. We will see what happens in court.
The Board is also exploring making Elon go through with the purchase and then Elon would appoint whom he wishes to the Board, likely the Board will ensure they receive appropriate compensation packages.
Linking to dividend paying stocks, most of the time these companies will be doing the mergers to enhance a division to ensure changes in the marketplace help them; to buy new talent; or reasons that benefit the company. If there is a fight similar to Twitter, it is time to find alternatives because the Board will be focused on the fight for the next 2 quarters.
There are more questions than answers, till the next time – to raising questions.