It's a bitter pill for Twitter to swallow, but it just might work.
π Background: Elon Musk recently bought a big stake in Twitter, was offered a board seat...and then turned it down. Phew, what a rollercoaster.
π What happened: Over the weekend, he offered to buy Twitter for a whopping US$43 billion. FYI, that's a US$6 billion premium on the company's market cap at the time.
π What else: Twitter's board members weren't too keen on the idea, so they set in motion a shareholders rights plan called the 'poison pill' π .
π‘The 'poison pill' is a merger and acquisition defence strategy used by a company to stop a hostile takeover (where an entity bypasses a company's board and takes a takeover offer straight to shareholders).
π‘The move allows shareholders to buy existing shares at a discount, diluting the ownership interest of a new party. It ain't a full-blown stop to the takeover offer...but it can deter a new buyer from making any moves.
π‘ It's a bit of a bitter pill to swallow, hence the name. But, it's effective at making buying the company less attractive. Your move, Musky.
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