Twitter Adopts 'Poison Pill' Defense Against Elon Musk Takeover

Twitter’s board of directors launched its defense against Elon Musk’s hostile takeover attempt on Friday by unanimously adopting a limited duration shareholder rights plan, often called a “poison pill.” 

The plan stipulates that if any individual or group acquires 15% of Twitter’s outstanding common stock without the board’s approval, others would be allowed to purchase new shares at a discount, thereby diluting the newcomer’s control of the company. “Poison pills” are a common tool for defending against hostile takeovers, and the Wall Street Journal (Center bias) reported Thursday that Twitter was considering the move. 

Twitter is consulting with Goldman Sachs and JPMorgan Chase, according to reporting by Bloomberg (Lean Left). Musk, who now owns 9.2% of Twitter, has consulted with Morgan Stanley, which reportedly owns 8%. In a Wednesday letter, Musk appeared to signal that he would dump his Twitter stock if his takeover bid was unsuccessful. Private equity firm Thoma Bravo, which several outlets called a “buyout firm,” also approached Twitter with an acquisition offer, according to Reuters (Center bias). 

Coverage was widespread and prominently featured across the spectrum on Friday, with most headlines highlighting the phrase “poison pill.” Coverage of the “poison pill” plan was mostly balanced, although coverage was divided when discussing related issues like Musk’s wealth and his intentions for online content moderation.