The governing board of the social media and liberal political activist giant Twitter made it difficult for Elon Musk to purchase more than 15 percent of the shares of the company without triggering a policy that would crush the value of his shares. To block him, the board voted for something called a “poison pill,” a dilution of the company shares by authorizing the dumping of shares on the stock market at a discount price for existing shareholders, if Musk was able to get more than 15 percent of shares. That would cost the billionaire billions by diluting the value of his proposed $43 billion investment. Twitter’s board met Thursday to review the world’s richest man’s offer, which was $54.20 per share.
Earlier this year, Musk had acquired more than 9 percent of the company and started teasing on the platform that he was considering taking a controlling interest in the left-bias company that eliminates the accounts of conservatives and practices censorship of patriotic points of view. Twitter banned President Donald Trump, but allows Vladimir Putin to maintain an account. Twitter banned the satire account The Babylon Bee, but has allowed the site to be used by Antifa accounts that used it to organize violent protests in 2020.
Fox News’ Lucas Manfredi reported on Friday, “Under the plan, which is also referred to as a “poison pill”, shareholders’ rights will become exercisable if an entity, person or group acquires beneficial ownership of 15% or more of Twitter’s outstanding common stock in a transaction not approved by the board. In the event that the rights become exercisable, shareholders will be entitled to purchase additional shares of common stock at a discounted rate.
This was the board saying it would not approve the Musk purchase, as it attempts to “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 goal is to force anyone trying to acquire the company to negotiate directly with the board. Investors rarely try to break through a poison pill threshold, according to securities experts — one said ‘it would be financially ruinous, even for him.’ But Mr. Musk rarely abides by precedent,” The New York Times wrote.
A press release from Twitter noted, “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 stock closed at $45.08 at the close of markets on Thursday.
I’d prefer to see it crash, too. Then Facebook.
Hear hear!
Mark Cuban said it was a bad deal, but what does he know about evaluating business deals?
Far less than Elon Musk.
The Twitter Board is creating a situation that will be treasonous to their obligations to share holders. They would be opening themselves up to huge lawsuits. Offering discounted shares to existing shareholders will only illegally devalue existing shares.
Elon is smart to reject a Board position to stay away from the nightmare the Twitter Board is creating.
I hope Elon Musk pulls the rug out from underneath Twitter and changes it from a censorship cesspool to a brilliant, patriotic bed of roses.
Doesn’t bother the board any. They barely own any Twitter stock among them. The entire board combined owns about 0.07% of the Twitter stock.
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Crash the stock value, won’t bother them one bit.
Hopefully Elon Musk can create a better platform that can beat Twitter AND Facebook.
Especially since Trump’s “Truth Social” is turning into a disaster.
So it’s not about profit it’s about propaganda. Seems like a shareholder might have an issue with that, given the boards fiduciary responsibility..
I think Musk will be just as happy to crash it as own it. Either way, mission accomplished.
Titter would rather spatchcock the bluebird than give in to Musk
Not too large on freedom from leftist speech. Revealing.
Twitter is for twits.
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PS: Suzanne, there is a website glitch here on MRAK today (4/16), that is not indenting all the responses to other comments, resulting in every comment being displayed in one long and confusing column.
ok, we did an update on software and apparently there is a gremlin. Thanks for letting me know. – sd
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