Twitter board approves 'poison pill' plan in desperate attempt to limit Elon Musk's stake in company

The company has adopted a "poison pill," which makes it difficult for Musk to increase his stake in the company past 15 percent. Currently, Musk owns just over 9 percent.

Hannah Nightingale Washington DC

Following Elon Musk’s $43 billion takeover bid issued on Thursday morning, the board of directors at Twitter unanimously voted to approve a plan that could potentially limit how many shares the Tesla and SpaceX CEO could buy.

According to The Wall Street Journal, the company has adopted a "poison pill," which makes it difficult for Musk to increase his stake in the company past 15 percent. Currently, Musk owns just over 9 percent.

"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," The Wall Street Journal explained.

According to CNBC, this plan is set to expire on April 14, 2023.

"The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders," the company said in a press release.

The company noted that this plan would not prevent the board from accepting an acquisition offer if the board approves it and deems it in the best interests of the company and its shareholders.

The placement of the plan follows weeks of news between the business magnate and the social media giant.

At the beginning of the month, it was announced that Musk had purchased more than 9 percent of a stake in the company. Shortly after, Twitter CEO Parag Agrawal said that Musk would be joining the company’s board of directors.

On April 10 though, just days later, Agrawal announced that Musk would in fact not be joining the board of directors.

Then, just days later, Musk made the $43 billion unsolicited takeover bid, equating to $54.20 per share in cash.

Notably, Musk, who is a prominent and frequent user of the platform, has been silent since yesterday evening, after posting a screenshot of Goldman Sachs' Q4 review of Twitter, where it was given a 12-month sell price target of only $30.

His silence also came just after posting a poll asking users whether "Taking Twitter private at $54.20 should be up to shareholders, not the board."


Join and support independent free thinkers!

We’re independent and can’t be cancelled. The establishment media is increasingly dedicated to divisive cancel culture, corporate wokeism, and political correctness, all while covering up corruption from the corridors of power. The need for fact-based journalism and thoughtful analysis has never been greater. When you support The Post Millennial, you support freedom of the press at a time when it's under direct attack. Join the ranks of independent, free thinkers by supporting us today for as little as $1.

Support The Post Millennial

Remind me next month

To find out what personal data we collect and how we use it, please visit our Privacy Policy

By signing up you agree to our Terms of Use and Privacy Policy
© 2024 The Post Millennial, Privacy Policy | Do Not Sell My Personal Information