Twitter board unveils poison pill strategy to defend against Musk takeover

Recently, Tesla's founder Elon Musk submitted a report to the SEC, planning to acquire Twitter at a valuation of $434 billion, priced at $54.20 per share, citing reasons related to freedom of speech. On the 15th, Twitter's board approved a shareholder rights plan to prevent hostile takeovers, seen as a defense measure against Musk's plan.

Twitter's Poison Pill Strategy to Deter Hostile Takeover

The Shareholder Rights Plan, commonly known as a "poison pill," was established in the 1980s to prevent hostile takeovers of companies. It is usually triggered when a shareholder acquires a certain percentage of shares, allowing other shareholders to purchase additional shares at a discounted price. In the case of Twitter's approved Shareholder Rights Plan, if an entity, individual, or group acquires more than 15% of common stock in an unauthorized transaction, it will trigger; the market price of the shares will be doubled for the purchase of additional shares, significantly diluting the interests of the potential acquirer.

The Shareholder Rights Plan aims to reduce the likelihood of any entity, individual, or group acquiring control of Twitter through open market accumulation. The plan has a duration of one year.

Musk Supporters' Comments: Twitter Underestimates Him

Internet entrepreneur Kim Dotcom commented here: "Twitter is not only playing with their shareholders by diluting their shares, but also showing they want to defend the censorship mechanism created for politicians. But they underestimate Musk, and this will not stop him."

Tyler Winklevoss, the founder of Genimi and a long-time supporter of Musk's acquisition of Twitter, stated that Twitter shareholders have been enduring stagnant stock prices for the past nine years and are now forced to swallow this poison pill, resulting in diluted shares.