Twitter’s board of directors has revealed a new plan to prevent Elon Musk from buying Twitter.
The company today announced a shareholder rights plan, commonly known in the financial world as the “poison pill,” a defense strategy companies can use to protect themselves from aggressive takeovers. The plan put into practice will be valid until April 14, 2023. According to
Cornell Law School’s Legal Information Institute, this approach allows shareholders to purchase additional corporate shares at a discount, effectively diluting the stock’s value and making it more expensive for prospective buyers.
According to the company’s statement, this plan is applicable wherever the organization acquires 15% or more of Twitter shares in a transaction to be approved by the board of directors. The beneficiaries will then also have the right to purchase additional shares of the company.
Elon Musk bought 9.2% of Twitter and refused to join the company’s board of directors a few days later. The other day, Musk announced a $41.4 billion bid to acquire Twitter. Musk emphasized that his intention is to ensure that the social media platform remains an inclusive arena for freedom of expression.
The prepared plan will not prevent the board of directors from accepting the purchase offer.
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