Musk countered the poison pill provision by making an offer to shareholders directly for them to tender their shares, despite opposition from the board. Twitter would have allowed shareholders to buy shares if Musk acquired a 15% stake, as more than 15% would give him control of the company. The company’s board of directors responded on 15 April with a ‘poison pill’, a defensive strategy to make a company less attractive to a hostile takeover bid.Ī poison pill is a shareholder rights plan that gives a company’s existing shareholders the right to buy new shares at a discounted price, which serves to dilute the ownership interest of the hostile party and possibly thwart their takeover. On 31 March, a filing with the SEC by fund management giant Vanguard showed it was the company’s largest shareholder, with a 10.29% stake in Twitter. Musk originally offered $54.20 a share for the social media network on 13 April, using a combination of debt and equity, according to a filing with the US Securities and Exchange Commission ( SEC). Musk’s attempts to back out of Twitter bid His purchase of 73.5 million shares at the last closing stock price of $53.70 a share on 27 October gave the stake a book value of $3.94bn. He initially became the company’s largest shareholder on 4 April, investing $2.89bn to take a 9.2% stake. Musk is the second most popular user on Twitter – behind former US President Barack Obama – with 110 million followers on the social media platform. Shortly after taking control of the company, Musk reportedly fired several top executives, including head of legal policy, trust and safety Vijaya Gadde, chief financial officer Ned Segal and CEO Parag Agrawal.
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