Twitter opposes Elon Musk takeover

san francisco Twitter’s board decided to take defensive action against a purchase of the company at a special meeting on Friday. The company announced that the new rules had been adopted unanimously.

The board has adopted what is called a “poison pill”. This is a measure that companies can generally take to ward off a hostile takeover.

The poison pill kicks in when an individual or group acquires 15% or more of Twitter’s outstanding common stock without board approval. Then other shareholders have the option to purchase additional shares at a reduced price. This would make recovery difficult. The rule should apply for one year.

The day before, Elon Musk had announced that he wanted to buy 100% of the shares of Twitter for around 43 billion dollars, then privatize the company. Musk has already bought a 9.2% stake in recent weeks. Stock investors don’t believe Musk will hit his mark: In New York, the stock price fell about 1.7% to hit $45 by midday. However, the poison pill does not mean that the board ultimately rejected the takeover bid.

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The board has explicitly reserved the right to continue to approve a sale of the company “if the board believes it is in the best interests of Twitter and its shareholders,” Twitter’s statement said.

Elon Musk wants to buy Twitter

San Francisco founder Mostafa Akbari-Hochberg said Musk is underbidding at $54.2 per share. “The offer is undervalued by $10 per share,” the Holobuilder CEO said. “At $65 per share or more, the sentiment would be very different,” assumed Akbari Highmountain.

A prominent investor on Twitter also called Musk’s offer too low. Saudi Prince Alwaleed bin Talal said the offer was not even close to the value of the social media platform.

>>Read also: Elon Musk’s billion dollar bid for Twitter is met with skepticism by investors

Speaking Thursday, Musk said he wasn’t sure he “could actually get it.” He added that his intention is to “retain as many shareholders as the law allows” rather than remaining the sole owner of the company himself.

“If the deal doesn’t go through because I don’t have confidence in management or believe I can drive the necessary change in the public market, I should reconsider my position as a shareholder,” Musk said.

Musk is by far the richest person in the world. His fortune is estimated at 251 billion dollars (232 billion euros) by the financial service Bloomberg, based on the latest stock market prices. The wealth is mainly made up of stakes in electric car maker Tesla and space company SpaceX. To buy Twitter, it would either have to sell shares or take out loans with the assets as collateral.

Twitter’s low coverage against takeovers

But even if Musk can raise the necessary funds, shareholder approval is the big hurdle. In addition to the free float, Twitter has several financial investors as major shareholders, each holding between 2% and 8% of the shares. It would therefore not be enough to convince only a few large shareholders to sell.

At the same time, Twitter is not as well protected against hostile takeovers as, for example, Facebook, Amazon or Google, where founders received shares with more voting rights. This allows them to retain control of the business even though they no longer own the majority of shares. Musk objected: Within the metagroup, for example, it ensures that “Mark Zuckerberg 14” always retains control over Facebook, WhatsApp and Instagram.

As a reason for his interest in Twitter, Musk says he wants to strengthen free speech on the platform. This is only possible if the short message service exits the stock market, he argues. Musk described his idea of ​​free speech as follows: “If someone you don’t like can say something you don’t like.” Within the bounds of the law, all opinions should be allowed.

This attitude has drawn criticism from experts such as former Facebook security chief Alex Stamos. You don’t add value to a platform by filling it 99.9% full of pornography and ads for fake brand name sunglasses and erectile dysfunction drugs.

>>Read also: Twitter CEO is Silicon Valley’s toughest job

In recent years, it has been mostly conservatives in the United States, and especially supporters of former President Donald Trump, who have accused Twitter and other online platforms like Facebook of “censorship”.

Most of them concerned measures against the spread of false information about the corona virus and Trump’s false claims that his victory in the 2020 presidential election was stolen.

With agency equipment

After: Four scenarios for Elon Musk’s takeover of Twitter.

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