That would run counter to Twitter’s acquisition plan for Elon Musk


In the financial world, the method by which Twitter would delay Elon Musk’s acquisition plan is called a poison capsule.

What seemed like a small investment at first glance soon turned into a full takeover intent, shortly after Elon Musk became a co-owner of Twitter, the businessman announced he would buy the entire company. Based on this, it seems that Musk would not just want to propose minor changes, but would take the social platform in a radically new direction, for example by loosening content restrictions a lot for freedom of speech and making Twitter much more transparent. Apparently, the current management doesn’t want to let that happen, no matter how much the offer made by the CEO of Tesla and SpaceX would bring in some profit.

One Friday Press release Twitter has introduced a time-limited plan to change shareholder rights, often referred to as a poison capsule in the financial world. This is because the plan will allow existing shareholders to buy additional shares, possibly at a lower price than the market dictates. Specifically, Twitter will allow the purchase of shares at a fixed price for nearly a year (until April 14, 2023) if someone acquires a stake in the company of more than 15 percent without paying shareholders a so-called management premium or leaving enough time to management to evaluate the share purchase.

Such measures are taken by companies in the event of an unsolicited takeover bid from outside, so it’s no surprise that Twitter’s moves point to Elon Musk’s intentions. At first, the businessman seemed to agree not to buy more than a 14.9 percent stake in Twitter, but later withdrew that promise, similarly relinquishing his right to sit on the company’s board as the largest individual investor, followed by a takeover bid.

Twitter CEO Parag Agrawal, by the way, has previously said the management is still evaluating Musk’s offer and has not decided whether to accept it. Musk, who was previously only active as a user but now also as an investor, said in a tweet, “it would be completely defenseless if they did not initiate a shareholder vote” on his offer.

The businessman also wrote in a recent statement to the stock exchange that he would “rethink his investor position” on Twitter if his takeover bid were rejected. In addition to the shareholder plan that makes the acquisition a less good business, Twenty is working on another solution. Fortune and they are trying to find another investor who would buy the company at the same price or higher than Musk’s offer, but would not interfere so drastically in its operation.

Are you more interested in IT? You can find our news and analysis for IT and infocommunication decision makers here.


Source: PC World Online Hírek by pcworld.hu.

*The article has been translated based on the content of PC World Online Hírek by pcworld.hu. If there is any problem regarding the content, copyright, please leave a report below the article. We will try to process as quickly as possible to protect the rights of the author. Thank you very much!

*We just want readers to access information more quickly and easily with other multilingual content, instead of information only available in a certain language.

*We always respect the copyright of the content of the author and always include the original link of the source article.If the author disagrees, just leave the report below the article, the article will be edited or deleted at the request of the author. Thanks very much! Best regards!