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In 2022 Elon Musk made a bid to buy Twitter for approximately $44 billion. Twitters...

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Finance

In 2022 Elon Musk made a bid to buy Twitter for approximately $44 billion. Twitters board initially did not accept the bid, and they tried to look for other potential buyers of Twitter.

  1. Is it possible that Twitters board might have different goals than Twitters shareholders (there might be a principal-agent problem between the shareholders and the board of Twitter)?
  2. Is it possible that the shareholders of Twitter would want to accept an offer for the company that the board might want to turn down (this occasionally happens, and this often leads to a hostile takeover bid)?
  3. Why might the goals of the board and shareholders be different?

Shareholders are the owners, and the board is the manager. Elon Musk has taken over Twitter and subsequently laid off about 80 percent of employees including the entire board of directors.

Instruction: Give an answer for each question.

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