Twitter Board Activated "Poison Pill Strategy". The Company Is Fighting Elon Musk's Hostile Takeover Efforts

The world's richest man Elon Musk is trying to gain control of the social media platform Twitter. As early as the beginning of April, it became clear that Musk had gradually bought 9 percent of all platform shares, but he did not want to end his plan to transform Twitter from a controlled platform into a platform with unrestricted freedom of expression by owning a minority stake, writes The Verge.

Musk immediately showed Twitter shareholders an offer of $ 43 billion, through which he would like to buy all the shares of the social media platform, become its sole owner and return it to private ownership, in which case, that Twitter would no longer offer its shares on the stock exchange. The privatised Twitter would change into an idol of freedom of speech.

Taking Twitter private at $54.20 should be up to shareholders, not the board

— Elon Musk (@elonmusk) April 14, 2022

However, Twitter's board members decided to fight against the billionaire's attempt to take control of the platform. Although Twitter chief Parag Agrawal said last week that the company was dealing with a takeover bid for the entire company, the Twitter board has now announced the introduction of a new plan known as the "poison pill strategy."

The poison pill strategy means, that if Musk tries to acquire more than 15 percent of Twitter shares, platform's shareholders will automatically be given the opportunity to buy new shares from the company.

As a result, larger number of Twitter shares will appear on the market than ever before, which would mean that Musk may own more than 15 percent of the shares, but with increasing numbers of shares, his stake in the company will decline. The board of Twitter has so far agreed that the plan will remain active for at least the next year.

The social network said it had implemented the plan in response to an "unsolicited" offer to buy Twitter. If Musk wanted to continue trying to get Twitter under his control after the plan, he would have to agree with the company's management and with shareholders to buy the shares, as any attempt to acquire a substantial portion of the shares would mean wasted money and loss of value due to the "poison pill" plan.

At the beginning of April, Musk accepted an offer to become a member of the board of Twitter, but once he found out, that as a member of the board he could not own more than 15 percent of the company's shares, he quickly rejected the offer.

"My intuition is telling me that having a public platform that is as trustworthy and widely inclusive as possible is extremely important," said Musk, who would like to remove a number of restrictions on Twitter and introduce the widest possible form of freedom of speech and expression.

Zobrazit příspěvek na Instagramu

Příspěvek sdílený The Verge (@verge)