Elon Musk vs Twitter: SpaceX founder and Tesla CEO Elon Musk is in discussion these days about buying Twitter. Meanwhile, a cold war has also started between Twitter and Elon Musk. While on one hand Musk is trying his best to take over Twitter, on the other hand Twitter’s board has come down to its last option to stop him. Twitter’s board of directors has made a new plan to prevent Elon Musk from forcibly taking over Twitter. Twitter has adopted the method of ‘poison pill’ to save the company.
In fact, Twitter’s board of directors has adopted a limited-time shareholder rights plan called the Poison pill. It could be difficult for Elon Musk to take over Twitter under the poison pill strategy.
How will the ‘poison pill’ work?
The ‘poison pill’ is a limited-term shareholder rights scheme that prevents anyone from buying more than 15 percent stake in a company. In this, the company allows others to buy additional shares of the company with some exemption. This reduces the value of the shares of the takeover attempter and makes it difficult to take over. Not only this, taking over the company also becomes very expensive. That means the price increases even more.
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Elon Musk holds 9% shares
This Shareholders Rights Plan will come into force only when an individual, group or entity tries to buy 15% of Twitter’s Outstanding Common Stocks. Elon Musk currently holds 9% of the shares. Let us tell you that Elon Musk has already made it clear that he will not talk to the company at a higher price than this. After this the board has adopted the method of ‘poison pill’.
What does Twitter have to say?
Twitter issued an official statement on Friday. In this, the board said that the rights plan would reduce the possibility that any entity, individual or group would attempt to control the company from the open market without paying a reasonable control premium to all shareholders. This plan will be applicable till 14 April 2023.
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Will not join the board
Let us tell you that recently it was reported that Twitter had also indicated about Elon Musk joining the board, which Elon Musk had not publicly confirmed. Twitter Inc. said in a regulatory notice last week that the company has reached an agreement with Elon Musk on Monday to join the board of directors. However, Elon Musk later wrote in response, “I look forward to working with Parag and Twitter to drive major improvements to Twitter in the coming months.” However, Musk did not admit to joining the board.