Twitter is putting up a fight against Elon Musk’s hostile takeover bid by offering its shareholders the opportunity to buy more company stock.
Twitter is putting up a fight against Elon Musk’s hostile takeover bid by offering its shareholders the opportunity to buy more company stock at a discounted rate — a defensive tactic known to investors as a “poison pill.”
The move was done to make it more difficult for Musk, who currently owns 9.2% of Twitter, from upping his stake in the company to acquire more than 15% of shares., saying that wanted to own the firm and take it private in order to restore its commitment to free speech. The social media platform’s board of directors announced on Friday that it has “unanimously” approved a “limited duration shareholder rights plan” that would remain in effect until a year from today.
The plan “will reduce the likelihood that any entity…gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium…” according to the company. Details of the plan will be specified in a special filing with the Securities and Exchange Commission, according to the San Francisco-based company.It’s a move that Wedbush Securities tech watcher Dan Ives said is likely to be challenged in court. He called it a “defensive measure” for the board that would likely not be viewed positively by shareholders, since it could dilute their shares and would be seen as unfriendly to an acquisition move.
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