The owners of Twitter prior to the flotation have basically sold a chunk of what they owned on the stock market. To do that they needed to put a value on those shares. Determining that price is pretty tricky but through one mechanism or another they settled on $26 a share.
The fact that people are now willing to buy them for $46 a share suggests that they basically sold them at too low a price (arguably $20 a share too low).
In doing so they've lost out on a fair bit of money. Establishing a value ahead of the flotation is difficult and often companies will err on the side of caution (that is sell slightly cheap) to make the sell off look like a success, but I think it's being suggested that this gap is too big to just be that and that some of the previous owners may be unhappy that they've lost out.
I understand what you mean by "they lost out a fair bit of money". However, that is not exactly true.
They have failed to gain that (admittedly huge) chunk of dollars but they have lost nothing: the have the same money they started with and they never had any more than that. You only lose when you start with X and end up with X-Y, for positive Y.
They have probably missed the opportunity to gain more but that is their mistake (if it is a mistake).
Did that information exist two days ago? Because if it did not exist, then there was no real $46 value. No REAL market (which is the place where information on value is) implies no monetary value (or a worthless one).
What happens is that they did not guess (and this is an important term, there is no inherent value in a guess) TODAY'S market's expectations correctly. But that has little to do with true monetary loss or gain.
Of course, their expectations today might be crushed. But personal expectations and hopes are not valuable as shares are.
That there were explicit people explicitly willing to buy those shares at that price. Exactly that. The explicit term is quite important. Secret information is not part of the market (it is not market information).
When you get sued, the court supervises a process called discovery to gather facts relevant to the suit. During the process, hard drives are imaged, documents are copied, etc. The opposing party's lawyers will make requests, such as: "We want to see all of the CEO's e-mails from March to June relevant to this matter." Your lawyers will sift through the e-mails to give opposing counsel what they want. Opposing counsel will then sift through the e-mails to find dirt on you.
It's by and large a cooperative process between your lawyers and the opposing party's lawyers, but its not really voluntary. If you refuse to answer a discovery request, opposing counsel can go to the judge and get a subpoena compelling you to hand the documents over. Hanging over the whole process is the threat of sanctions: for your attorneys as well as for the company. For your attorney, it is a violation of the civil rules of procedure to unreasonably refuse production requests, and it is a violation of the ethical rules to not hand over documents that are relevant and not privileged just because they might hurt your case. The former can result in sanctions, and the latter in disbarment (i.e. the professional death penalty), so while your lawyer loves you and is on your side, he will cough up the documents the other side requests. If the client refused to cooperate, the court can hold him in contempt as well.
> ...the court supervises a process called discovery ...
Boy, you're sure a glass-is-half-full type, 'rayiner --- my experience in litigation was that:
1) many, many litigation attorneys like to play chicken, doing their utmost to obstruct your discovery (or to demand unreasonable discovery for themselves), stopping just short of making you so mad that you go to the judge; and
2) the vast majority of litigators hate going to the judge, knowing that most judges utterly loathe discovery disputes and basically absent themselves from the discovery process unless they absolutely have to get involved. (There are exceptions; some judges announce that counsel can get them on a conference call just about any time they're not actually on the bench --- not surprisingly, those are the cases where counsel can actually be pretty reasonable ....)
My understanding is that if the judge thinks one party is not cooperating in discovery, or is purposefully hiding evidence, he can issue a default judgement solely on that basis (regardless of all the other aspects of the case). Since the penalty for playing games in the discovery process can be so severe, it's very rare for parties to try to conceal evidence (hiding saved emails or chat logs or whatever).
The enforcement mechanism is mostly paranoia. The ethical codes for attorneys requires you to rat out your colleagues at the threat of getting in trouble yourself if you fail to do so. Documents are managed in review databases with time stamps and user tracking. Opposing counsel will go through your productions and might spot inconsistencies. Opposing counsel will also spend hours grilling witnesses, looking for inconsistencies and references to documents that haven't been produced. Opposing counsel also generally has a good idea of what kind of documents should exist, given that corporate transactions are generally pretty stylized.
At the most basic level, the system is built on trusting lawyers to act dutifully as officers of the court. Corporate law firms care very much about their brand for trustworthiness, because at the end of the day their business depends on that brand. Nobody wants to be like Arthur Andersen, which went from a $9 billion company to nothing because people stopped trusting their brand (for the actions of a relatively small group of partners).
Team Best Buy seems pretty unethical, and when Best Buy's lawyers manually check which CEO e-mails were relevant to the case I'm sure honest mistakes sometimes get made. It would be awfully easy for dishonest 'mistakes' to be made with one or two of the most incriminating e-mails.
Are you really saying there's no independent auditing? That the entire system relies on Best Buy's lawyers incriminating their co-workers and the employer who puts bread on their table? That seems exceptionally trusting in lawyers' professional ethics.
Does the discovery at least have to be done by an different law firm to the corporation's day-to-day legal work?
This sort of thing is almost always handled by an outside law firm, similar to how audits are handled by an outside accounting firm.
Remember also that plaintiff's counsel also thoroughly interviews witnesses under oath. Cross-checking witness accounts can highlight inconsistency in the documentary record. It also adds a second group of people who don't want to hide information under threat of punishment.
Likely it was a subpoena compelling them to provide the emails. I believe in Apple v Samsung there was a matter of Samsung failing to retain some emails which were relevant. In that case, the jurors were instructed to treat the deleted emails as incriminating.
Edit: I was on my mobile and I couldn't confirm this. In fact, as the peer comment said, when it refers to the litigants the process is discovery. A subpoena is required to compel a third party to testify or provide documents. Discovery is normally just a give and take, unless one party objects and the court intercedes.
Actually, I believe in the end the court didn't give any kind of jury instruction about the deleted e-mails in Apple vs Samsung. Apple's contention was that Samsung should've anticipated that they were about to be sued and retained any relevant e-mails even before the lawsuit had been filed, and the judge sided with Apple on this until it turned out Apple hadn't bothered to retain their own e-mails from that period either despite having actual firm knowlege they were going to file a lawsuit.
Because we have certain organisations protected by the state (they're like early-retirement homes for political friends).
The organisation in question here, the GEMA, "protects" artists (in a similar way the music industry protects them) and they have special legal privileges (like that they can assume that every music record is protected by them and the other party has to prove otherwise).
We have a public broadcasting service that enchroaches with (redundant) channels (annual budget of 7 bn EUR). You have to pay a monthly fee once you have a TV or radio or computer, next year it's mandatory for every househeld (240 EUR annually). Good place for political friends.
We have chambers of commerce that you're required to "join" once you start a business. They waste money all the time and are unaccountable. Also for good political friends.
I guess you see the pattern... :(
I won't go so far to call it a managed democracy or a crony cleptocracy, but often I get this impression.
How do you guys think this actually works in a sense of equity? Google Ventures gets a stake in Firespotter. What happens if they spin-off one of their ideas into a new company? I take it Google Ventures is still involved then, right? Why invest otherwise?