Twitter ‘poison pill’ strategy likely to backfire

 

Twitter ‘poison pill’ strategy likely to backfire

Posted by Yudi Sherman

Apr 18, 2022

Elites making concerted effort to block Musk from acquiring platform

Twitter’s Board of Directors Friday voted to adopt a shareholders' rights plan, otherwise known as a “poison pill” strategy, in response to Elon Musk’s attempt at a hostile takeover. 

As reported by Frontline News, Musk presented a generous offer to Twitter last week to buy 100% of the company in an all-cash deal at $54.20 per share. The offer amounts to about $43 billion, a near-$7 billion premium over the company’s market cap. 

In response, Twitter threatened a “poison pill” maneuver, which involves offering fresh shares to the public at a discounted price, thereby diluting Musk’s shares and making it very costly for him to purchase the company. The board has said that it will initiate the plan if Musk acquires over 15% of the company. 

By adopting this strategy, Twitter’s directors have signaled that they would rather harm the company than sell it to Musk, who is a self-acknowledged “free speech absolutist” and has vowed to make the social media platform a haven for free speech. 

The board notably did not put the decision to a shareholder vote. 

On Thursday, the Tesla CEO took a poll on Twitter, asking if taking the platform private at $54.20 should be up to the shareholders, not the Board of Directors. 83.5% of the 2.8 million respondents said yes. 

If Musk walks away, Twitter may be facing a volley of lawsuits brought from shareholders who would have just lost out on a significant return on their investments. 

"Twitter's insiders essentially just decided to screw over their shareholders, crash their stock, and open the company up to massive lawsuits just to prevent Elon Musk from running Twitter in a way that won't rig elections or censor their political opponents," wrote Greg Price.

“As a @twitter shareholder, I demand a vote on @elonmusk’s offer. The board has a fiduciary responsibility to me and all the other shareholders to maximize our investment,” tweeted Michael Sullivan. 

“I am a long time @twitter shareholder,” said Clay Travis. “Today’s actions by the board violate their fiduciary duty to maximize shareholder returns and if they don’t lead to a sell of the company for over $54.20 will lead to monster lawsuits costing the company billions of dollars.” 

“Twitter’s board of directors just robbed shareholders out of billions of dollars,” wrote Mike Cernovich. “It’s Enron all over again.” 

The elites are making a concerted effort to block Musk from acquiring the platform. A Musk-owned Twitter would likely mean a complete overhaul of the platform and would disable the Left’s most effective tool, causing a significant change to America’s political power structure.   

Just after Musk became Twitter’s largest shareholder last week, investment firm The Vanguard Group knocked him off his perch by upping its stake to 10.3%. 

The Vanguard Group is also the largest shareholder of Pfizer, which stands to gain from Twitter’s current censorship of anything that challenges the Pfizer vaccine's safety and effectiveness. 

For his part, Musk can use other methods to pursue a hostile takeover.  

The world’s richest man could partner with other billionaires to acquire the company in a tender offer, as Dallas Mavericks owner Mark Cuban recently tweeted, suggesting Musk partner with right-wing billionaire Peter Thiel. 

Musk signaled that he may pursue a tender offer, tweeting Saturday “Love me tender”. 

The SpaceX CEO could also initiate a proxy contest, in which he gets enough shareholders to vote and override the board.