Twitter’s reaction to Elon Musk is a real reaction

Despite his non-negotiable bid, Elon Musk was rightfully suspicious of his takeover bid from Twitter. While he said “not sure” it would lead to anything, the social network gave his answer over the weekend. The board of the social network blue bird immediately decided on a solid counterattack mechanism.

Several options were available to Twitter to counter the (hostile) takeover by Elon Musk, which was decided without consensus with the management team. Unanimously, the social network’s shareholders have chosen the strongest method to protect themselves from Elon Musk’s capital increase: the establishment of a “poison pill”.

Answer from Twitter

Also known as a “limited-life shareholder rights plan,” the “poison pill” is a way of fighting back against a hostile takeover as announced by Elon Musk. So, if the entrepreneur crosses the 14.9% stake in Twitter’s capital (Twitter capital threshold), all other shareholders could buy shares at discounted prices to also rise to capital, drowning Elon’s stake in musk.

So to get that 50% majority stake, the CEO of Tesla and SpaceX would have to shell out even more money. Currently, Elon Musk owns 9.2% of the company’s shares. For the “poison pill,” the redemption price would go up a lot, and it’s not certain Elon Musk is still determined enough to commit to it. When it was offered last Thursday, the offer had already valued Twitter at more than $40 billion.

Elon Musk is no longer the largest shareholder

In the weekend’s news, Twitter’s stake also dropped Elon Musk to second place in the ranking of companies with the most shares in the company. Given Elon Musk’s 9.2% stake, wealth manager Vanguard Group reported that it increased its stake in the company to 10.3% for a total of $3.6 billion (based on Twitter’s share price at the close of March 2019). Friday) increased.

The rest of this soap opera promises to be cracking. On the one hand, Elon Musk had threatened Twitter to sell all shares if the company rejects his takeover bid, on the other hand, during a TED conference in Vancouver on Thursday evening, the entrepreneur announced that he had a plan B in case the negotiations failed. As for his plans when he becomes the owner of the social network, the man has already mentioned several tracks.

Leave a Comment