Twitter Wants To Prevent Elon Musk From Taking Over The Company

Twitter's board of directors has decided to resist the Tesla boss's takeover attempt. Musk currently has a Twitter share of about nine percent.

Twitter is using a so-called poison pill to defend itself against a takeover by Tesla boss Elon Musk : This countermeasure provides that other shareholders can buy additional shares cheaply if a buyer exceeds the 15 percent mark. Companies threatened by takeovers often take this classic step.

The board of directors announced that the measure should apply for one year. The approved plan will reduce the likelihood that "any institution, person or group" will gain control of the company through the acquisition of shares on the open market without paying a "reasonable control premium" to all shareholders, Twitter said.

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Musk had offered all Twitter shareholders on Thursday to take shares at a price of $ 54.20. However, he admitted on the same day that he was "not sure" whether he would succeed in taking over Twitter. In the past few weeks, he has already bought a stake of 9.2 percent. In New York trading, the share price fell by around 1.7 percent to $ 45 in the middle of the day.

Debate about freedom of speech and false reports

The Tesla boss justified his interest with the fact that Twitter could only develop its potential as a platform for freedom of speech outside of the stock market. Musk described his idea of ​​freedom of speech as follows: "If someone you don't like can say something you don't like." All opinions should be allowed within the law. 

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This attitude drew criticism from experts such as former Facebook security chief Alex Stamos. Twitter has a history of cracking down on the spread of false information about the coronavirus and Donald Trump's false claims that his 2020 presidential election victory was stolen from him. The former US President has since been banned from Twitter.

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Musk also downplayed the dangers of the virus in the early days, criticizing restrictions in California as "fascist".

Musk's wealth is estimated at $251 billion (€232 billion) by the Bloomberg financial service, based on the latest stock prices. The wealth is mainly made up of holdings in the electric car manufacturer Tesla and the space company SpaceX. To buy Twitter, he would either have to sell shares or take out loans with the holdings as collateral.

But even if Musk could raise the necessary funds, shareholder approval is the big hurdle. In addition to the free float, Twitter has several financial investors as major shareholders, each holding between two and eight percent of the shares. So it would not be enough to convince only a few major shareholders to sell. A key shareholder, Saudi Prince Alwaleed bin Talal, has already publicly rejected Musk.

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