New York (Times Of Ocean)- Twitter on Friday adopted a poison pill to stop Elon Musk, a 9.2% shareholder, from significantly increasing his stake in the social media platform.
To protect itself from billionaire entrepreneur Musk’s $43 billion cash offer, Twitter is implementing a limited-duration shareholder rights plan.
On April 14, 2023, the poison pill expires, and it will only become effective if a shareholder acquires more than 15% of the company without board approval.
A poison pill is a defensive tactic used by companies facing hostile takeovers. Existing shareholders can purchase additional stock at a discount, thereby diluting outstanding shares. Twitter’s poison pill will expire one year from now.
Following the blockbuster news Thursday, April 14 that Musk has offered to acquire Twitter for a premium of $54.20 a share in cash, Twitter called an emergency meeting of the board of directors for 10 a.m. Pacfic (2 p.m. EST) and an all-hands meeting for 2 p.m. Pacific (5 p.m. EST).
Musk said he has “sufficient” funds for the purchase outright. He has also stated that he has a “Plan B,” without specifying what that plan is.
Musk also said Thursday that he offered to purchase Twitter because he thinks it is essential that free speech be included in the sphere.”
At the TED Conference in Vancouver, Elon Musk said he believes Twitter’s algorithm should be open-source, and the code should be available on Github, a Microsoft-owned platform for sharing software code.
“A public platform that is massively trusted and broadly inclusive is absolutely vital to the future of civilization,” Musk said in the interview with Chris Anderson, curator of Ted Conferences and former editor of Wired.
Musk could fund his acquisition of Twitter through a “stock swap” or by converting $43 billion worth of Tesla shares into Twitter shares.