Twitter Board Plays 'Poison Pill' — but Elon's Response Shows He's All in to Win

(AP Photo/Chris Carlson)

We’ve been covering the continuing drama of Elon Musk’s effort to buy Twitter. Where we last left you in the saga was that the Twitter board announced that it was going to adopt a “poison pill” defense – a move trying to prevent him from acquiring more than 15 percent of the company. It’s designed to make the acquisition less attractive.


Now, the problem with this move is that it’s denying the shareholders the gain they would have made from the sale, so is detrimental to their interests. Musk was offering to buy for a share price much higher than what the shares were currently priced. So, the board could be opening themselves up to a bunch of lawsuits for failure to uphold their fiduciary responsibility to the shareholders by not taking the deal.

But if you’ll recall, we reported how Musk said he had a “Plan B” if the Twitter board decided they didn’t want to make the sale to him. While he didn’t outline what that plan might be, it might already be going into effect.

It looks like Musk is not backing down in the face of the poison pill or in the face of the coincidental story that the SEC/DOJ might be looking into him, a story seemingly meant to frighten him off. It sounds like he may be going all-in, from new reports. Sources close to the matter told the New York Post that Elon is speaking to investors to come in with him to buy Twitter outright. Sources say that a new plan with those partners will be forthcoming. One of the possible partners named is Silver Lake Partners, a private equity firm. A Musk spokesperson wouldn’t confirm it, but they likely wouldn’t until they had it all worked out and everything in place to go.

While the poison pill might limit Musk himself, if he went in with partners, he could potentially circumvent it.

But that pill may not stop other entities or people from acquiring their own shares of up to 15% of the company. Those owners could partner with Musk to force a sale, make changes in the executive ranks or push for other overhauls of the company.

Twitter hasn’t yet filed its shareholder rights plan with the SEC, though it announced the poison pill in a statement. The SEC filing will give more details on whether it prevents like-minded investors from teaming to buy a greater than 15% stake.

“This is not over,” a source close to the situation said.


Another element in the saga is that the private equity firm Thoma may also make a play to buy Twitter, blocking out Musk.

So, we’ll have to see how it rolls out. But Musk has made clear that he’s not going to be easily put off, and he’s serious in his effort. This report seems to prove it. Now, we’re going to see how serious they are about blocking him out or going after him to stop him.

But I have to say, it’s a courageous move on his part, knowing all the guns that are going to be leveled against him. So, props to him for sticking to his guns for free speech — that says a lot about him.


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