Twitter board approves ‘poison pill’ provision to ward off Elon Musk takeover

Twitter has just adopted a poison pill against a potential hostile takeover bid by Elon Musk, who recently made a $43 billion bid to buy 100% of the company’s stock.

The plan, which was unanimously approved by Twitter’s board, is designed to make it much more difficult to buy more than 15% of the company’s stock, according to the press release issued by Twitter announcing the moving.

Poison pill provisions (also known as shareholder rights plans) are legally designed to make it prohibitive for any shareholder to accumulate more than a set percentage of a company’s stock.

“The rights plan is intended to allow all shareholders to realize the full value of their investment in Twitter,” the company said. “The Rights Plan will reduce the likelihood that any entity, person or group will gain control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or giving the board enough time to make informed judgments and take actions that are in the interests of shareholders.”

The plan is triggered when a shareholder attempts to acquire 15% or more of the company’s outstanding shares without the approval of the company’s board of directors. If such an attempt were made, current shareholders would then have the option of purchasing additional shares at a discounted price and the entity triggering the plan would have to purchase any additional shares above the 15% threshold at a premium.

Musk has offered to pay $54.20 per share in his unsolicited takeover bid with the stated intention of taking the company private if his bid is accepted. Musk has been a vocal critic of the way Twitter has been run, so a takeover by Musk would almost certainly bring about substantial changes to the popular social media platform.

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Opinion: Elon Musk buying Twitter would be an absolute disaster

Currently, the “free speech” debate on Twitter is more or less at an impasse, with all sides claiming they are being censored by the company. To be clear, Twitter is a private company, not a government entity. The company is free to set its own policies that users must agree to in order to use the platform, provided it complies with applicable laws.

There’s no law that says you can’t be banned from Twitter for what you post on the platform, and it’s up to the company to decide which posts violate their terms of service. Whether that’s so is another matter, but for now, that’s the way it is, and that’s what apparently bothers Musk, who has criticized the company for censoring users.

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Given the often toxic interactions users may encounter on Twitter (and the Internet more broadly), lifting everything restrictions on what users can post would not lead to a flourishing of positive and constructive debate. We have already conducted this experiment, we know the result.

The internet is not the liberating frontier of free speech that early web pioneers like Musk believe it should or could be if it were simply free from Big Brother authority, whether governmental or commercial. It’s proven to be a brutal digital coliseum where the most socially vulnerable users are fed to the lions for the cynical thrill of a small subset of its users who, like Joker parodies, claim to want to watch the world burn but who are really only interested in burning their perceived enemies at the stake of internet anonymity security.

Like all social media companies, Twitter has a complicated track record in this regard, but it’s also one of the most responsive to these challenges. To argue that these challenges can be overcome by individual users through savvy or thicker skin is easy for someone like Musk, who typically basks in the sycophantic adoration of his fans. He’s one of the richest people in the world, and nothing insulates you from the devastating emotional effects of online bullying like money.

Musk wants to be free from the restrictions Twitter places on its users, because of course it does. Nobody that rich ever wants someone to tell them what they can and can’t do, but those rules aren’t in place to protect people like Musk. They are there to protect the rest of us, and especially women; ethnic, sexual and religious minorities; and other vulnerable people who have already been irreparably harmed by the online social media crowd with the current restrictions in place.

Holding a town hall to discuss the important issues of the day cannot take place if there is someone in the crowd shouting obscenities, racial slurs and threatening everyone around them. If Musk took control of Twitter with the intention of preventing “censorship”, that would be the end of Twitter.

It’s already walking a tightrope between being a controversial public forum and an infernal site. The only people Musk would free would be the trolls, and the platform’s mass exodus would be almost instantaneous, setting off a fatal cycle where we normers bail out for other platforms, which just makes the voice of the trolls even more strong, forcing even more people off the platform. Then there are Twitter employees themselves, who would likely leave in droves, causing the site’s quality to plummet, further eroding its user base.

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If Musk’s goal is to destroy Twitter, I can’t think of a better way for him to do it.

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