The defendants appeal and ask for a stay.

$1.1B in TPL market cap was lost with TPL’s 7,674,867 shares experiencing a $149.12 loss in today’s trading. The stock was down 8.5%.

The market today was no picnic, but in context, TPL’s performance was ugly: SPX -0.6%, XLE -0.5%, WTI -1%, BSM -2.5%, VNOM +0.2%

I interpret this move to be a mandate from the market for cooler heads to prevail. With appeals possible and the looming responsibility of the board to take action on 2023 proposals 4 and 7 (special meeting and written consent), there is an opportunity for the board to come together and compromise for the benefit of shareholders. There is leverage on both sides here.

The “currency” to do deals will get only get weaker if common sense does not emerge while the cash on the balance sheet will continue to earn less than the historical IRR of the company. Shitty all around. Let’s figure it out.

Press release

8-K

As previously disclosed, once a final order is entered and an amended charter is filed, the Company intends to use a portion of the newly authorized shares to affect a stock split of the Company’s common stock in the form of a stock dividend, and the Court has conditioned the Share Authorization Proposal on such a stock split. In addition, the Share Authorization Proposal increases the number of authorized, unissued shares of common stock.

A split unlocks the authorized shares which could potentially be used to dilute the voting rights of current shareholders by 50%. I have no idea on timing but c-suite and modern corporate board incentives (empire expansion, comp expansion, ego, the thrill of the deal, boards prioritizing management over shareholders to get other seats) would have me guess that it is a top priority. Things shareholders care about (ROE & ROA maximization, margin expansion, return of capital, share price expansion) are lower on the priority list.

IIRC, transactions below 20% dilution can be done without shareholder approval. All transactions (I think) need board approval.

https://courts.delaware.gov/Opinions/Download.aspx?id=356230

My analysis: Voting eligibility on #4 was a jump ball so he went to the videotape on hand hygiene.

Discovery is a bitch.