Elon Musk’s ambitious plans to take over Twitter and turn the company private have hit a major snag. Musk offered over $40 billion to buy the company outright earlier this week. Twitter’s board of directors has now taken measures to ensure that doesn’t happen.

Fox Business has reported that a “poison pill” plan has been enacted by the company. Under the plan, shareholders’ rights will become exercisable if any person or group owns 15% or more of the company’s outstanding shares. If that occurs, stockholders will be able to purchase additional shares at a discounted rate.

The company says the plan was put in place to reduce the likelihood of a single entity gaining control of the company through a stock purchase. This makes it virtually impossible for Musk to buy out the company. It would need to be approved first.

“[The plan] is intended to enable all shareholders to realize the full value of their investment in Twitter” and 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.”

If the board does believe that Elon Musk purchasing the company is in the best interest of shareholders, they could theoretically allow it. That is very unlikely to happen. The plan will expire on April 14, 2023.

Elon Musk said on Thursday that he has a “plan B” prepared. There were no details given and Musk declined to comment further. Time will tell if Elon enacts that plan as a counter to Twitter’s poison pill.

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Tags: Elon Musk
Michael Perry

Michael Perry is a news contributor for Ringside News and Thirsty for News. Michael has an M.A. in Communication Technology from Point Park University in his hometown of Pittsburgh, PA.

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