The board of directors announced in a press release that the company is adopting a limited duration shareholder rights plan. While the company doesn't name Musk directly, it is clear that they are trying to prevent him from buying the social network.
Musk has a 9.2% stake in the social network. Yesterday, he made an offer to acquire all of the company's shares. Musk is willing to pay $54.20 per share. The social network is valued at $43.4 billion.
Musk's offer isn't that generous, even though it seems like a big number. Just a few months ago, the stock was trading around $60. Tech stocks are currently experiencing a massive selloff, but that doesn't seem to be affecting their business.
I think it's important for there to be an inclusive arena for free speech. Musk said at a conference that it was important that people had both the reality and the perception that they were able to speak freely within the bounds of the law.
Kyle Wiggers spoke about hostile takeovers. A poison pill can be used to counter a takeover attempt. Musk's ownership stake is a goal of a poison pill. The Wall Street Journal reported earlier this week that a poison pill was on the table.
Existing shareholders will be able to purchase additional shares at a discount. If an entity, person or group has a 15% stake in the company, other shareholders can buy more shares. The plans to buy more than 15% of the company would be staggered.
The Rights Plan will make it less likely that any entity, person or group will gain control of the company without paying all shareholders an appropriate control premium or giving the Board enough time to make decisions that are in the best interests of shareholders.
If the company's board wants to approve an acquisition offer, they can vote to approve an ownership of more than 15% of the company. The pill is valid until April 14, 2023.
Elon Musk offers to buy Twitter for $43 billion
Is Elon Musk undervaluing Twitter in his unsolicited bid?
Elon Musk says he ‘doesn’t care about the economics’ of buying Twitter
If Elon Musk gets his way, Twitter will lose years of progress
What hostile takeovers are (and why they’re usually doomed)
All Rights Reserved © 2024
