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Twitter adopts ‘poison pill’ defense
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Twitter adopts ‘poison pill’ defense

Twitter board adopts “poison pill” defense. Musk could still take over Twitter.

Where: United States

The Facts

On Friday, Twitter said its board of directors has unanimously adopted a “poison pill” defense in response to Tesla CEO Elon Musk’s proposal to buy the company.
Twitter said the move, formally called a “limited duration shareholder rights plan,” aims to enable its investors to “realize the full value of their investment” by reducing the likelihood that any one person can gain control of the company without either paying shareholders a premium or giving the board more time.
The “poison pill” strategy is often used to defend against hostile takeovers.
The strategy is designed to give corporate boards an option to flood the market with so much newly created stock that a takeover becomes prohibitively expensive. The strategy was popularized in the 1980s when corporate raiders were stalking publicly held companies.
Musk could still take over the company with a proxy fight by voting out the current board of directors.

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