The Chaotic Week Musk Tried to Buy Twitter – And the Questions That Lie Ahead
April 19, 2022
Will Twitter’s plan actually stop Musk’s purchase?
Under the “poison pill” plan, Musk would have to spend an increasing amount of money to maintain a majority stake in the company. In theory, the hostile investor’s cash would eventually run out, but this may be more complicated in practice when contending with the richest man in the world. Musk is worth around $260bn.
Twitter’s “poison pill” plan will only go into effect if Musk (or any other would-be purchaser) acquires more than a 15% stake in the company. Such plans have been triggered only a handful of times in history, said Alon Kapen, a corporate lawyer with expertise in SEC compliance at the New York firm Farrell Fritz.
“No rational buyer would knowingly exceed that threshold,” he said.
But Musk already has indicated he may be willing to exceed that threshold, denying Twitter’s offer for an executive seat on its board of directors – which came with the condition his ownership stake of Twitter would remain below 14.9%.
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