Twitter Moves to Block Elon Musk From Increasing Stake
The social-media company takes the step a day after the tech entrepreneur made a $43 billion unsolicited takeover bid
Twitter confirmed its board would review Elon Musk’s proposal.
PHOTO: LAURA MORTON FOR THE WALL STREET JOURNAL
By Cara Lombardo
Updated April 15, 2022 12:37 pm ET
Twitter Inc. moved to prevent Elon Musk from significantly increasing his stake the day after he made a $43 billion unsolicited takeover bid for the social-media company.
The company on Friday adopted a so-called poison pill that makes it difficult for him to increase his stake beyond 15%. The billionaire founder of Tesla Inc. already owns a more than 9% stake that he revealed earlier this month.
The Wall Street Journal reported Thursday that Twitter was weighing such a move.
Poison pills, also called shareholder-rights plans, are legal maneuvers that make it hard for shareholders to build their stakes beyond a set point by triggering an option for others to buy more shares at a discount. They are often used by companies that receive hostile takeover bids to buy themselves time to consider their options.
They need to convince shareholders that Musk's deal wouldn't be good for them.
They need to financially prove that the $51 per share offer is a bad deal. They can't.
What's to prevent a lawsuit from a group of Twitter stock holders against the board from going forward?
If only there could be a class action lawsuit from every American with a 401k. I know two of my investments list twitter in its top 10 holdings. The others probavly also still have it, but not to a point its in the top 10.
The shareholders being liberals cheerleading the board of directors for rejecting Elon's offer.
Nothing prevents it, just saying that the board simply refusing the offer isn't enough to sue, there are certain conditions that need to be met.