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Twitter uses “poison pill” to prevent Elon Musk from taking over

Accordingly, the social network Twitter uses what is known as a “poison pill,” a “mixture” of measures that businesses have been using for decades.

Journalist Paul Harloff of the Associated Press (USA) said: “The stock market and even non-market participants are keeping a close eye on the play between Elon Musk and Twitter. Two weeks ago, Elon Musk announced he owns 9% of Twitter stock. However, this week has announced that it wants to buy out this company. Twitter has begun implementing a self-defense plan, ie “poison pill”, to prevent Elon Musk company acquisition or at least slow down his attack momentum“.

The ingredients of each “poison pill” are different, but they are all intended to “dilute” the intended acquirer’s stock. Accordingly, it will facilitate the board of directors to “flood” the market with newly created shares, making the acquisition of the company so expensive that it is beyond the means of the buyer.

Since the 1980s, this strategy has become popular as public companies are aggressively sought to acquire by oligarchs.

Twitter uses poison pill to prevent Elon Musk from taking over - Photo 1.

Currently, billionaire Elon Musk owns about 9% of Twitter shares. (Photo: Sky News)

Currently Twitter has not released all information about the “poison pill” that I will use to deal with Billionaire Elon Musk. However, once a shareholder begins to gather 15% or more of the shares, Twitter’s “poison pill” protest plan will be deployed. Currently, Elon Musk only owns about 9% of Twitter shares.

The “poison pill” therapy isn’t meant to be used to completely eliminate a person from pursuing a company purchase. Sometimes the company’s board of directors also use this therapy to push up the company’s price. And when the two sides reach an agreement on a price that pleases each other, the “poison pill” is withdrawn to complete the transaction. Twitter has insisted that its “poison pill” will not prevent the board from accepting an offer to buy the company at a higher price.

With an estimated fortune of $ 265 billion, billionaire Elon Musk has a heavy enough pocket to pay more than the $ 43 billion price he is offering to Twitter.

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