The cute little Twitter bird has teeth. Today the company announced it had poisoned the local watering hole, hoping it would block Elon Musk as he seeks to swallow the social media company in a hostile takeover.
The company’s board voted unanimously on Friday to create a new “rights plan” that allows shareholders to buy additional shares at a discount if any party likes, for example, a relatively unknown internet troll named Elon Musk, decide to acquire 15% or more of the shares of the company. Musk currently owns around 9% of the company’s shares, and although he had the largest share earlier this month, he has since been eclipsed by the Vanguard Group, a huge investment management company which owns 10%. of the society. The rights plan lasts until April 14 next year.
This effectively means that Tesla CEO Musk must negotiate directly with the board, rather than simply buying stock with abandon and impunity. Rumors of such a move have been circulating online for the past few days. The council would meet last night to assess the Tesla CEO’s offer, while Musk trolled the company on his own social network.
Yesterday, during an interview at a TED Live event, Musk offered a rather reductive view of the situation, saying “I don’t really care about the economy.” The CEO of what remains the world’s largest electric vehicle company has would have has hired investment bank Morgan Stanley to advise on the takeover, but whether Musk has the funds to complete the deal remains an open question.
“I’m not sure I can get it,” he said during the TED Q&A, which, while great for Musk fans on Twitter who like to watch him troll the rest of the world, doesn’t do much. -thing to ensure American security and Exchange Commission, which he had problems with it in the recent past (He called the agency members “bastards” at TED). Former SEC Chairman Harvey Pitt told Bloomberg that “I think it’s very hard to take everything that Musk does seriously; he always has ulterior motives.
Pitt added that by telling Musk that if he was not allowed to buy the company, he should “reconsider his position”, Musk created an overhang in the market, which means investors are less likely to buy shares. The former SEC chairman also said that “in all likelihood” the board would reject Musk’s offer.
Will investors opt for Musk’s deal?
Now it all depends on whether the holders are willing to share their toys with a well-known man to kick the sand in the faces of other children. Saudi billionaire Prince Alawaleed bin Talal, a board member who owns a 4.45% stake in Twitter, posted a tweet rejecting Musk’s offer, saying the proposal the price of $54 per share does not correspond to Twitter’s “growth prospects”. Musk fired back a tweet, saying “What’s the Kingdom’s view on free speech for journalists?”
And all that action didn’t do well for shares of Twitter, which closed yesterday at around $45 per share. the the stock price has improved somewhat with today’s news, but is still down from the October 2021 high of $60. the roller coaster of the last few weeks did nothing to help Tesla stock pricethat is, as investors grapple with a leader dividing his time between three companies.
And it’s not just the people at the top who are feeling the brunt of this purchase. The Washington Post reported that Twitter employees are feeling the pressure of what it could mean for Musk to control their jobs. Reuters released a report that CEO Parag Agrawal tried to reassure the employees at a general meeting on Thursday. Even still, was unable to answer questions about whether Musk’s definition of free speech matched theirs.
Musk said he wants Twitter to become more open, but he explained precisely what that means. He offered a edit button for tweetsbut when pressed on ethics and button timing, it seemed to backtrack.