The board of social media giant and liberal political activist Twitter has made it difficult for Elon Musk to buy more than 15% of the company’s shares without triggering a policy that would crush the value of his shares. To block it, the board voted for what’s called a “poison pill,” diluting the company’s stock by allowing shares to be dumped on the stock market at a discount to existing shareholders, if Musk could. get more than 15% equity. It would cost the billionaire billions by diluting the value of his proposed $43 billion investment. Twitter’s board of directors met on Thursday to consider the offer for the world’s richest man, which was $54.20 a share.
Earlier this year, Musk acquired more than 9% of the company and began teasing on the platform that he was considering taking a majority stake in the left-leaning company that weeds out conservative accounts and censors people. patriotic views. Twitter has banned President Donald Trump, but allows Vladimir Putin to hold an account. Twitter banned satirical account The Babylon Bee, but allowed the site to be used by Antifa accounts that used it to stage violent protests in 2020.
Fox News’ Lucas Manfredi reported on Friday, “Under the plan, which is also referred to as a ‘poison pill,’ shareholder rights will become exercisable if an entity, person or group acquires beneficial ownership of 15% or more of the stock of Twitter. common shares in a transaction not approved by the board. In the event that the rights become exercisable, shareholders will be entitled to purchase additional common shares at a reduced rate.
It was the board that said it would not approve Musk’s purchase because it attempts to “reduce the likelihood of any entity, person, or group gaining control of Twitter through of accumulation in the open market without paying all shareholders an appropriate control premium or without providing the board with sufficient time to make informed judgments and take actions that are in the best interests of shareholders.”
“The goal is to force anyone trying to acquire the company to negotiate directly with the board. Investors rarely try to cross the poison pill threshold, according to securities experts – one said “it would be financially ruinous, even for him”. But Mr. Musk rarely respects precedent,” The New York Times wrote.
A Twitter press release stated: “The Rights Plan will reduce the likelihood of any entity, person or group gaining control of Twitter through open market accumulation without paying all shareholders a premium. control or without giving the board sufficient time to make informed judgments and take actions that are in the best interests of shareholders.
The stock closed at $45.08 at the close of trading on Thursday.