The ingredients of each poison pill vary, but they're all designed to give corporate boards an option to flood the market with so much newly created stock that a takeover becomes prohibitively expensive. The strategy was popularized back in the 1980s when publicly held companies were being stalked by corporate raiders such as Carl Icahn — now more frequently described as “activist investors."
Although they are supposed to help prevent an unsolicited takeover, poison pills also often open the door to further negotiations that can force a bidder to sweeten the deal. If a higher price makes sense to the board, a poison pill can simply be cast aside along with the acrimony it provoked, clearing the way for a sale to completed.
Adopting a poison pill also frequently results in lawsuits alleging that a corporate board and management team is using the tactic to keep their jobs against the best interests of shareholders. These complaints are sometimes filed by shareholders who think a takeover offer is fair and want to cash out at that price or by the bidder vying to make the purchase.
“If the current Twitter board takes actions contrary to shareholder interests, they would be breaching their fiduciary duty," Musk tweeted. “The liability they would thereby assume would be titanic in scale."
He made them swallow a poison pill.
https://abcnews.go.com/Technology/wireStory/explainer-twitters-poison-pill-supposed-84110702
It works if the government helps out. It backfires if they don't.