Twitter Hits Elon Musk With 'Poison Pill' To Stop His Buying Spree

In a move to stop Elon Musk from owning Twitter, the company has launched a "poison pill" with the purpose of preventing the billionaire from increasing his existing stake in Twitter. Friday, Twitter's board voted unanimously to adopt the plan which is deployed to stop a potential hostile takeover like what Musk launched this week.

In a 13D SEC filing made public Thursday, Musk announced his offer of $54.20 to buy all outstanding Twitter stock with his ultimate intention of taking the company private.

Twitter's poison pill defense, also called a Rights Plan, states, "the rights will become exercisable if an entity, person or group acquires beneficial ownership of 15% or more of Twitter's outstanding common stock in a transaction not approved by the Board. In the event that the rights become exercisable due to the triggering ownership threshold being crossed, each right will entitle its holder (other than the person, entity or group triggering the Rights Plan, whose rights will become void and will not be exercisable) to purchase, at the then-current exercise price, additional shares of common stock having a then-current market value of twice the exercise price of the right."

This Rights Plan will be enforced for a year.

Musk's current stake in the company is more than 9% and the guy was ready to blow another $41 billion to buy the remaining shares.

However, a Saudi prince who owns a bunch of Twitter didn't like the plan at all.

"Interesting. Just two questions, if I may. How much of Twitter does the Kingdom own, directly & indirectly? What are the Kingdom’s views on journalistic freedom of speech?," Musk fired back to Saudi Prince Al Waleed bin Talal Al Saud.

What now? Musk has been quiet on Twitter since Thursday when he tweeted out a Goldman Sachs report.

There's a good chance he's already digested this poison pill deployed by the Twitter goons.

“The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders,” the company said in its Friday announcement.