Twitter has taken action to keep Elon Musk from significantly increasing his stake in the microblogging service, The Wall Street Journal reported Friday (April 15).
The move comes one the day after the 50-year-old multi billionaire founder of Tulsa and SpaceX made a $43 billion unsolicited takeover bid for the social-media company.
Twitter has adopted a poison pill to make it tougher for Musk to increase his stake beyond the 15%. Earlier this month, he revealed in a Securities and Exchange Commission that he holds a more than 9% investment in the social media network.
Devised by law firms in the 1980s to protect companies from corporate raiders, a poison pill essentially lets a takeover target flood the market with new shares or allow existing shareholders, other than the bidder, to buy them at a discount.
On Thursday (April 14), the newspaper reported Twitter was considering a poison pill to stop Musk.
See also: Twitter Considers ‘Poison Pill’ to Fend off Elon Musk
Musk has said he wants to make Twitter a private company and turn it into a platform for “free speech,” according to the SEC document.
Musk also said if his offer isn’t accepted, he might have to rethink his position as a Twitter shareholder.
“If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder,” Musk said in the filing.
Twitter said in a statement that the rights plan won’t prevent the company from engaging with potential acquirers or accepting a takeover bid if the board determines it is in the best interest of shareholders.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More