The board of directors unanimously adopted a poison pill in response to Musk's proposal to buy the company.
The limited duration shareholder rights plan is intended to enable its investors to realize the full value of their investment by reducing the likelihood that any one person can. Poison pills are used to defend against hostile takeovers.
If Musk's stake grows to 15% or more, the plan would take effect. Musk could still take over the company with a proxy fight. The board can engage with parties or accept an acquisition proposal if it is in the company's best interests.
The social media platform needs to be transformed as a private company in order to build trust with its users, according to a securities filing by Musk.
Musk said in the filing that he believes free speech is a societal imperative for a functioning democracy.
He said that having a public platform that is broadly inclusive is important to the future of civilization.
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