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Twitter adopts 'Poison Pill' defense against Elon Musk takeover

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Google Oneindia News

New Delhi, Apr 16: Twitter defended itself from hostile acquisition bids by billionaire Elon Musk's unwelcome offer to take the company private and make it a bastion of free speech.

Representational Image

Twitter, in a statement, said its board of directors has unanimously adopted a "poison pill" defence in response to Tesla CEO Elon Musk's proposal to buy the company and take it private.

What is it?

A poison pill is a strategy used by companies, which makes it difficult for a hostile acquirer to buy out a majority stake in the company, given the acquirer control over its management and shareholding. In this policy, all existing shareholders will be given the right to purchase additional shares at a discount, effectively diluting the ownership interest of the hostile party.

Under Twitter's plan, each right will entitle its holder to purchase, at the then-current exercise price, additional shares of common stock having a then-current market value of twice the exercise price of the right.

Why is Musk interested in Twitter?

Ostensibly because the service, he says, isn't living up to its potential as a "platform for free speech." Musk insists that he's not interested in making money off Twitter and on Thursday said his motivation sprang from the realization that "having a public platform that is maximally trusted and broadly inclusive is extremely

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