HP Aichi

Main Menu

  • Excess Supply
  • Factoring UK
  • Feasibility Studies
  • Capital Structure
  • Saving Investment

HP Aichi

Header Banner

HP Aichi

  • Excess Supply
  • Factoring UK
  • Feasibility Studies
  • Capital Structure
  • Saving Investment
Capital Structure
Home›Capital Structure›Twitter adopts ‘poison pill’ to thwart Musk takeover

Twitter adopts ‘poison pill’ to thwart Musk takeover

By Allison Nichols
April 15, 2022
0
0
Placeholder while loading article actions

SAN FRANCISCO — Twitter threw a roadblock at Elon Musk’s hostile takeover bid on Friday, adopting a plan known as the “poison pill” that would make it much more expensive and complicated for the Tesla CEO to take social media network control.

The plan aims to prevent Musk from increasing his stake in Twitter by giving other shareholders the chance to buy more shares of the company at a reduced price. This would effectively flood the market with new shares that Musk would have to buy at a higher price to acquire the company, making a takeover potentially prohibitively expensive.

Elon Musk attempts hostile Twitter takeover, calling path ‘painful’

Twitter said in a statement that the plan will “reduce the likelihood” of Musk or any entity taking control of the company without paying a bonus to shareholders or giving the board more time.

As a result, Musk will have to negotiate with the board, revise his offer, or be prepared to shell out significantly more money, which corporate governance experts have said is highly unlikely.

“A poison pill is a way to keep someone away until you can get a higher price. It makes it outrageously expensive for the person to buy it,” said Charles Elson, founding director of the Weinberg Center for Corporate Governance. from the University of Delaware “It’s a doomsday machine, it’s the atomic bomb, everyone’s wiped out – that’s the key.”

Musk did not immediately respond to a request for comment. Musk told a TED talk on Thursday that he has a back-up plan if his initial bid for the social media giant doesn’t work out, but he declined to elaborate.

The so-called poison pill is the latest move in a roller coaster series of events over the past two weeks, following Musk’s big reveal on April 4 that he had taken a more than 9% stake in the social media giant. At the time, this made the CEO of Tesla and SpaceX Twitter’s largest shareholder and sent shockwaves through Silicon Valley. Prior to the disclosure, Musk had conducted polls of his roughly 80 million followers seeking feedback on Twitter’s support for free speech and even suggested that a new social media company might be needed.

The following day, the company said it had invited Musk to join its board, a move that would limit the billionaire’s stake to less than 15% and avoid a takeover. On Sunday, Twitter CEO Parag Agrawal tweeted that Musk had turned down the seat, following a tweet from Musk in which he questioned whether the company’s headquarters in San Francisco should be used as a safe haven for sans -shelter and made a vulgar joke about the name. He also wondered if the platform was dying.

Elon Musk joins Twitter board, promises ‘meaningful improvements’

Musk’s investments in Twitter date back to late January. Months earlier, the Tesla CEO had sold billions of shares in the company after pledging to sell 10% of his stake in the world’s most valuable automaker.

Then this week, he launched a hostile takeover bid to take Twitter worth about $43 billion.

Musk offered to buy Twitter for $54.20 per share. This represents a significantly higher price than immediately before Musk’s involvement, but lower than what Twitter has traded at times over the past year.

Elon Musk’s Twitter offer frustrates employees. It’s a risk for him

The “poison pill” would be triggered if Musk crossed the 15% ownership threshold on Twitter.

The terms of Twitter’s plan suggested that shareholders would have the right to buy stock at a set price – which would then trade for a market value twice what they bought it for. Musk, the potential buyer, would not be eligible for the discount.

Musk has spent weeks stressing the need for “freedom of speech” on the social media site, launching polls and launching tweets aimed at influencing the discussion. It appears to be of relatively recent interest to the explosive CEO, who also runs aerospace company SpaceX, tunneling firm The Boring Company and brain chip start-up Neuralink.

How Elon Musk played on Twitter

He called the problem a “civilizational risk”, placing it – for him – in the ranks of population collapse and the usurpation of humans by artificial intelligence.

Musk, at the conference, said Twitter’s algorithm should be “open source” so that content moderation decisions are made fully public and people can see what types of tweets are being promoted and removed. Twitter said it does not limit tweets based on views or opinions expressed within them.

Douglas MacMillan contributed to this report.

Related posts:

  1. What does the possession construction of Haitian Worldwide Holdings Restricted (HKG: 1882) appear like?
  2. Vitality Monster, a Chinese language energy financial institution rental firm
  3. Fonterra farmers categorically rejected any suggestion to herald outdoors shareholders within the dairy cooperative
  4. London pre-opening: shares will rise because of US stimulus plan

Categories

  • Capital Structure
  • Excess Supply
  • Factoring UK
  • Feasibility Studies
  • Saving Investment

Recent Posts

  • Greenfern secures deal to supply medical cannabis
  • Single Phase Wet & Dry Cleaners Market Research Report – Global Forecast to 2030 – Indian Defense News
  • How can SMEs go public?
  • Not all “Secure 2.0” proposals in the House and Senate are the same
  • Australians are traveling more carefully after border closures and COVID-19 lockdowns
  • Terms and Conditions
  • Privacy Policy