In a bid to thwart Tesla and SpaceX CEO Elon Musk’s attempted takeover of Twitter to make free speech changes, the company’s board has announced that existing shareholders will be able to purchase additional shares at a discount if a person or group builds a stake of more than 15% in the company without board approval.
The move, which is known as a “poison pill,” makes it harder for a person or group to take control of the company because their stake can be diluted whenever they own more than 15% of the company. However, it could also hurt existing shareholders because their stock would be diluted too and this dilution would lower the share price.
The poison pill will be in place for the next year.
Twitter’s poison bill defense follows Musk announcing a 9.2% stake in the company earlier this month and then offering to take the company private to make free speech changes yesterday. Musk had offered to pay $54.20 per share in cash and the stock last traded at a price of $46.66 – 13.9% below Musk’s offer price.
After offering to buy Twitter, Musk continued to defend free speech in an appearance at TED 2022.
“A good sign as to whether there’s free speech is, is someone you don’t like allowed to say something you don’t like? If that is the case then we have free speech,” the billionaire said.
“And it’s damn annoying, when someone you don’t like says something you don’t like. That is a sign of a healthy, functioning, free speech situation.”
During the interview, Musk said that his reasons for buying Twitter were not for profit.
“My strong intuitive sense is that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization,” said Musk.
“I don’t care about the economics at all.”