Following the adoption of a "poison pill" defense by Twitter last week to prevent Elon Musk's takeover of the social media giant, Florida Governor Ron DeSantis announced on Tuesday that lawyers for the state are currently looking to see how they can hold the Twitter board of directors "accountable for breaching their fiduciary duty."
According to News 4 JAX, In a Tuesday press conference, DeSantis questioned the social media company for not jumping on the offer delivered by Tesla and SpaceX CEO Elon Musk, offering 20 percent above its then stock value.
As The Wall Street Journal previously explained: "Poison pills, also called shareholder-rights plans, are legal maneuvers that make it hard for shareholders to build their stakes beyond a set point by triggering an option for others to buy more shares at a discount. They are often used by companies that receive hostile takeover bids to buy themselves time to consider their options."
"I don’t want to expend resources just to kind of be able to send out a press release or something. I mean, we really want to feel like we have a solid theory to be able to win," DeSantis said.
"But I can tell you just looking at it, most of the time the people I talk to would say if you’re on the board in that situation, you really do need to sell. It’s a massive return for your shareholders. I mean, most people and their investment vehicles are not making 20 percent in a year," he continued.
Elon Musk offered $43 billion, or $54.20 per share, to own Twitter. This offer was around 20 percent higher than the $45.08 closing price the day he made the offer.
According to News 4 JAX, Twitter shares closed on Monday at $48.45, still $5.75 shy of Musk’s offer.
DeSantis said that Twitter’s rejection of the offer was political, rather than financial. Twitter has yet to officially reject or accept Musk’s offer, and have left the table open for negotiations.
"They rejected it because they know they can’t control Elon Musk," DeSantis said. "They know that he will not accept the narrative and that their little play toy of Twitter, it would not be used to enforce orthodoxy, and to basically prop up the regime and these failed legacy media outlets. And so that’s why they did it. It was not, in my judgment, because it wasn’t a good business deal."
"They advertise as being open platforms. They advertise as you being able to express yourself and communicate with other people, and yet, their censorship decisions and deplatforming decisions are based on viewpoint discrimination," DeSantis argued.
According to News 4 JAX, "The poison pill would give stockholders as of April 25 the right to buy one one-thousandth of a share of preferred stock for each common share they own, at a price of $210. The rights are triggered if any person or group of investors buys 15% or more of the company’s shares without board approval."
James Cox, a professor of corporate and securities law at Duke University, told News 4 JAX that triggering the poison pill could spell the end of Twitter.
"You want to create an event that Musk would never want to trigger because it would be the death of Twitter," Cox said.
Currently, Musk owns just over 9 percent of the company’s shares.
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