Twitter announced on Friday that its board of directors has unanimously adopted a “poison pill” defense to prevent Elon Musk from acquiring the company.

Article by Emel Akan from our premium news partners at The Epoch Times.

If any business, person, or group acquires 15 percent or more of Twitter’s outstanding common stock through a transaction not allowed by the board, according to the announcement, other stockholders will be able to purchase additional shares of stock at a discount price.

The plan expires on April 14, 2023. The company is expected to announce the details of the plan including the discount rate in a filing with the U.S. Securities and Exchange Commission soon.

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The poison pill technique, also known as a shareholder rights plan, is used as a defense strategy by a target firm to prevent or discourage a potential hostile takeover.

The term “poison pill” comes from the time of wars and espionage when spies carried poison tablets. If they feared they were going to be detected, spies would take these pills to avoid being questioned by the enemy.

Martin Lipton, a famous mergers and acquisitions lawyer, developed this strategy in the 1980s when corporate takeovers were becoming increasingly widespread.

When a corporation is threatened with a takeover, it may employ the poison pill method to make itself less attractive to the potential buyer by raising the cost of acquisition and creating strong disincentive.

The method provides existing shareholders the option to buy additional shares at a lower price, thus diminishing a new, hostile party’s ownership stake.

If Musk reaches 15 percent ownership, the poison pill will be triggered. This will allow other shareholders to buy stock at a discount. Musk will be the sole shareholder who will be unable to acquire these cheaper shares.

This will make the billionaire’s acquisition of the firm more expensive and difficult. Musk currently owns over 9 percent of the company’s stock.

The use of a poison pill does not always imply that the company is unwilling to be bought. The board of directors of the company may be using it as a tactic to boost the offer price.

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In the statement, Twitter said that the board will accept an offer if “it is in the best interests of Twitter and its shareholders.”

However, the use of poison pills by the board could come at a significant cost to the company and its shareholders.

It could hurt the share price of the company and discourage future investors. Institutional investors, in particular, are hesitant to invest in companies that employ such aggressive defense tactics.

Shareholders may also sue the company’s board for rejecting an attractive offer and failing to act in their best interests.

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In response to a report that the business was considering adding a poison pill clause, Musk stated on Twitter that the move could expose the board to a “titanic” amount of liability because they would be “breaching their fiduciary duty.”

The board of Twitter includes Bret Taylor, co-CEO of Salesforce; Parag Agrawal, Twitter’s CEO; Jack Dorsey, Twitter’s co-founder; and Mimi Alemayehou, a senior vice president at Mastercard.

According to corporate lawyers, poison pills can be quite successful in discouraging a takeover, but they are generally not the first choice in defending the company. This is because the plan can fail if the acquirer is persistent. It may also end up harming the company.

Musk earlier said he’s “not sure” if he will be successful in acquiring Twitter.

“My strong intuitive sense is that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization,” he said at the TED2022 conference on April 14 in Vancouver.

“I don’t care about the economics at all,” he said.

When asked if he had a “Plan B” in case his offer is rejected, Musk replied, “There is.”

Zachary Stieber contributed to this report

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One Sick Day Proves We Need More Voices in Truthful Media

On October 19, I was sick. It crossed my mind that I had finally gotten the ‘rona, but my wife’s cream of chicken soup and a few extra hours of sleep into mid-afternoon had be back up and running after a sleepless night before.

When I finally stumbled over to my computer in the evening, I was met with a deluge of concern from readers. They asked what had happened as only one article had been posted that day. Generally, we post between 10-20 daily between all of the sites, not included curated and aggregated content. Seeing that we’d only posted my super-early morning article before taking the rest of the day off had readers assuming the worst.

We have a wonderful and talented group of writers who volunteer their time for the sites and their readers. Sharing their amazing perspectives has always been a blessing to us because we cannot afford to hire anyone at this time. But having great writers is meaningless if we don’t have great editors, or at least one additional. My wife helps me read and edit stories from time to time, but I’m a one-man show when it comes to getting the stories posted.

Whenever I highlight our desperate need for donations, I note that we do not receive money from Google ads even though most in conservative media are beholden. I often ambiguously note that the money donated will help us grow. Today, I’m highlighting a specific need. We must get an editor to help take some of the load and to expand on our mission of spreading the truth to the world. One sick day proved that.

The great news is that there is no shortage of people who CAN help. I am emailed variations of resumes every week by people who are much smarter than I am. As much as I’d love to hire some of them, we simply cannot. That takes money and as blessed as we’ve been to receive donations and collect ad money (though not from Google or Facebook), we have still fallen short.

Those who have the means, PLEASE consider donating. We have the standard Giving Fuel option and people can donate through PayPal. We are also diving into what we believe is extremely disruptive technology at, the world’s first major donation portal for crypto. I’ll be talking a lot more about them in the near future. Those who prefer Bitcoin can send to my address here: 3A1ELVhGgrwrypwTJhPwnaTVGmuqyQrMB8

We can get the voices out there and we’re willing to shine a spotlight on new talent. We just need the resources to make it happen. If you can help, we would be extremely grateful.

Thank you and God bless!

JD Rucker

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