Elon Musk's Twitter Takeover Bid Hit With 'Poison Pill' Move: What Does That Mean for Tesla CEO?
Elon Musk's Twitter takeover offer was hindered by a measure from the social media company on Friday.
According to CBS News, Twitter adopted a poison pill plan that can prevent the Tesla founder and any other group or company from significantly increasing their stake in the social media company.
Twitter named its poison pill plan "The Rights Plan," claiming that the measure will "enable all shareholders to realize the full value of their investment in Twitter."
In addition, The Rights Plan will also diminish the possibility that any person, group, or entity, has control over Twitter through open market accumulation without giving other shareholders a control premium on the social media app, and giving enough time to the board to make sound decisions.
CBS News noted that the poison pill plan will be effective once an entity, group, or individual were able to buy at least 15 percent of Twitter's stock in a purchase that is not approved by the board.
Twitter emphasized in its statement that its poison pill plan will end on April 14 next year.
The poison pill plan was first used in the 1980s when lawyers from an oil company targeted by corporate raider T. Boone Pickens advised the company to fill the market with new shares, making it difficult for Pickens to buy a controlling stake.
READ NEXT: Elon Musk Slammed by Truth Social CEO David Nunes for Being Twitter's Biggest Shareholder
Tesla Founder Elon Musk Buys Twitter
The poison pill plan was announced by Twitter a day after Elon Musk offered to buy the social media app 100 percent.
Musk reportedly offered $54.20 per share in cash, according to an updated regulatory filing on Thursday, per The Verge.
Musk's offer also valued Twitter at around $43 billion, the outlet noted, citing CNBC.
"I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy," Musk said in a letter addressed to Twitter Chairman Bret Taylor.
Musk also claimed that he will have to reconsider his position as a shareholder if his offer is not accepted by Twitter.
However, not everyone was impressed with Musk's offer.
According to Bloomberg News, Prince Alwaleed bin Talal, the prince of Saudi Arabia, blatantly said that he rejects Musk's offer, per CBS News.
The prince of Saudi Arabia reportedly controls more than 4% of Twitter.
Elon Musk and Twitter
Earlier in April, the Tesla founder became the biggest shareholder of Twitter after he acquired a 9 percent stake in the company.
According to the Securities Exchange Commission, Musk owns 74,486,938 Twitter shares. He reportedly bought the shares on Twitter after he questioned the media platform's dedication to free speech and the First Amendment.
READ NEXT: Twitter Net Worth 2022: How Much Is Twitter Valued After Elon Musk Made $43 Billion Offer?
This article is owned by Latin Post.
Written By: Joshua Summers
WATCH: AP Explains: Twitter's 'Poison Pill' for Elon Musk - From Associated Press
Subscribe to Latin Post!
Sign up for our free newsletter for the Latest coverage!