Twitter Board Adopts a ‘Poison Pill’ Rather than Consider Musk’s Offer – Free Speech Be Damned
Twitter has decided to implement a poison pill rather than move forward with Elon Musk’s lucrative offer to purchase the company. Are the shareholders alright with this?
Zerohedge reports:
As was widely expected and reported in the aftermath of Elon Musk going hostile on Friday morning, on Saturday morning Twitter adopted a measure that will shield it from hostile acquisition bids in a desperate step to prevent billionaire Elon Musk’s offer to take the company private and make it a bastion of free speech.
The board set up a shareholder rights plan, also known as a “poison pill” which as we clarified yesterday for the benefit of the company’s overly dramatic, overly literal and overly snowflake employees, is not literal…
… and which is exercisable if a party – read Elon Musk – acquires 15% of the stock without prior approval, lasting for one year (if the pill had expired the day after the midterms it may have been a bit too obvious). The plan seeks to ensure that anyone taking control of Twitter through open market accumulation pays all shareholders an appropriate control premium, according to a statement Friday.
For a company that has struggled greatly with value creation – on Friday TWTR stock closed at $45.08, or 18 cents higher than where it closed on its first day as a public company, or $44.90 – a poison pill defense strategy allows existing shareholders the right to purchase additional shares at a discount, effectively diluting the ownership interest of the hostile party. Poison pills are common among companies under fire from activist investors or in hostile takeover situations.
Under Twitter’s plan, each right will entitle its holder to purchase, at the then-current exercise price, additional shares of common stock having a then-current market value of twice the exercise price of the right.
We reported yesterday on the reaction to Elon Musk’s offer to buy Twitter. Those on the left hated the idea of free speech. They like communists running the show. Those for free and fair speech were thrilled.
Musk shared that he was making the offer on Twitter because free speech is so important for future generations. He said it wasn’t about the money.
Right now it looks like Twitter would rather destroy itself than sell to Elon Musk.
Twitter is considering a poison pill to thwart @elonmusk‘s offer. They would rather self-immolate than give up their censorship programs. This shows you how deeply committed they are to Orwellian control of the narratives and global discourse. Scary.
— Cameron Winklevoss (@cameron) April 14, 2022
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