Twitter’s ‘Poison Pill’ Plan To Block Elon Musk, May Not Work

The powerful in the United States, especially on the left, continue to push for radical change not willing to give back one inch of territory that have captured in the American landscape.

Just look at Twitter’s board and the sudden investigation of Musk launched by the SEC and DOJ following the billionaire’s offer to acquire the non-profitable social media company.

Twitter has not achieved profitability, in 2021 it lost another 221 million dollars despite investing 5.077 billion.

Fox Business’s Charles Gasparino has recently reported on the potential investigations of Musk on Neil Cavuto’s “Your World.”

Gasparino told Cavuto:

“He’s under investigation, a joint investigation, by the DOJ and the SEC over lots of stuff, including some of the stuff involving how he went about accumulating his shares on Twitter and how he disclosed that, whether he properly disclosed his intentions—which was obviously a full takeover—also some of this stuff with Tesla, you know, just disclosures there.”

Gasparino continued:

“It’s a joint investigation, it’s serious, I’m not saying — a lot of these investigations turn up nothing—-  they’ve been looking at him for a long time, so you would think by now they’d have something, but they’re clearly—I spoke with a source, very close to it, who says it’s a serious investigation by the DOJ and the SEC into all those matters.”

Twiter’s board is attempting to stop Musk, the world’s richest man, from buying the company by adopting a so-called “poison pill” defense though it may not be enough to stop Elon from succeeding in his quest to take over the company.

A “poison pill” effectively allows all shareholders, except those trying to buy out the company, to purchase newly offered shares at a discounted price. Musk would have to purchase the new shares at a higher price, which could end up being too much for him to afford if he wanted to take over the company.

The Washington Post reported:

As a result, Musk’s chances at a clean takeover of Twitter have been severely reduced. He will now have to negotiate with the board, revise his offer or be prepared to pony up significantly more cash — something corporate governance experts said is highly unlikely.

There are other, more extreme options, such as waging a fight to unseat the board, but they would represent an even more complicated path for Musk.

One includes partners that could be announced within days, those sources said. 

Musk could team up with private-equity firm Silver Lake Partners, which was planning to co-invest with him in 2018 when he was considering taking Tesla private.

Silver Lake’s Co-CEO Egon Durban is a Twitter board member and led Musk’s deal team during the 2018 failed effort to take Tesla private, sources said. Silver Lake declined to comment.

The Daily Wire reported on Friday:

There are three possible outcomes now, none of which are ideal for Twitter’s current board: Musk could win by successfully initiating a proxy contest to remove the directors and nix the poison pill; Musk forces the company to find a “white knight,” or alternative buyer, potentially at a higher price, thus making his shares more valuable; Musk walks away and leaves the company and the board facing a pile of lawsuits as shareholders blame them for hurting the value of their stock.

The New York Post reported on Friday that Musk was speaking with other investors who may align with his vision for the company in an effort to get more financial backing so that he can take over the company.

Dallas Mavericks owner Mark Cuban suggested this week that Musk should team up with right-wing billionaire Peter Thiel to buy the company.

Who will win the battle of the Titans, nobody knows for sure, but it sure will be interesting to watch.

By: Eric Thompson, editor of EricThompsonShow.com. Follow me on Twitter and MagaBook