Twitter’s board of directors is deploying defensive measures to prevent Elon Musk, the world’s richest man and a declared free speech absolutist, from taking over the company.
The pro-censorship, leftist-run social media platform has adopted a Shareholder Rights Plan, a corporate tactic used to deter buyouts.
Colloquially known as a “poison pill,” the measure allows existing shareholders to buy more shares at a discounted price, diluting the stake of any shareholder seeking to acquire the whole company and theoretically raising the costs of doing so.
In a press release, Twitter said the limited duration Rights Plan, which will be triggered if Musk’s share grows to 15 percent or more, be in effect until May of 2023, “will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation.”
The Rights Plan is intended to enable all shareholders to realize the full value of their investment in Twitter. The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders.
The Rights Plan does not prevent the Board from engaging with parties or accepting an acquisition proposal if the Board believes that it is in the best interests of Twitter and its shareholders.
While the Rights Plan will raise the cost of any takeover attempt, it still relies on existing shareholders’ appetite to buy shares at a rate that prevents Musk or any other party from acquiring a large enough stake to take over the company.
However, as most of Twitter’s top shareholders are giant investment companies that manage trillions of dollars of assets, such as BlackRock, Vanguard, and State Street, their resources considerably exceed that of any one individual — even the richest man in the world.
There would still be a takeover avenue available to Musk if he assembles enough shareholder support to vote out Twitter’s current directors.
The prospect of a free speech absolutist taking over Twitter has sent regime elites into a frenzy. In addition to the meltdowns from progressives on social media and reported panic from woke employees inside the company itself, there have even been warnings from a former chairman of the Securities & Exchange Commission that the Biden Administration could try to block Musk’s takeover attempt.
Allum Bokhari is the senior technology correspondent at Breitbart News. He is the author of #DELETED: Big Tech’s Battle to Erase the Trump Movement and Steal The Election.
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