Day: April 15, 2022

Twitter’s board of directors on Friday voted unanimously to use a tactic called a “poison pill” to fend off Elon Musk’s attempt to take over the company.

In such a defensive tactic, all Twitter shareholders except Musk could buy more shares at a discount. This would dilute the world’s richest person’s stake in the company and prevent him from recruiting a majority of shareholders supporting his move.

If Musk’s ownership in Twitter grows to 15% or more, the poison pill would go into effect.

Musk, who earlier this week was revealed as the company’s largest individual shareholder, with 9.2% of the shares, later offered more than $43 billion, or $54.20 a share, to purchase the entire company.

Musk’s offer would provide a substantial premium over Twitter’s current stock price of just more than $45 a share.

Free-speech concern expressed

When Musk made his offer, he lamented the company’s stance on free speech.

“I believe free speech is a societal imperative for a functioning democracy,” Musk said in the filing. “I now realize the company will neither thrive nor serve this societal imperative in its current form.”

But instead of putting Musk’s offer up for a vote with Twitter shareholders, the company’s board said Friday that it would instead offer its shareholders a chance to buy even more shares at a steep discount, effectively diluting the price of the stock.

The plan “will reduce the likelihood that any entity … gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium,” the company said.

The Twitter board’s plan will be effective for one year.

As rumors of a poison pill action circulated Thursday, Musk speculated via Twitter on what might happen.

“If the current Twitter board takes actions contrary to shareholder interests, they would be breaching their fiduciary duty,” he wrote. “The liability they would thereby assume would be titanic in scale.”

One analyst, Dan Ives of Wedbush Securities, told the New York Post that the board’s move was a “defensive measure,” adding that shareholders would not likely view it positively.

“We believe Musk and his team expected this poker move, which will be perceived as a sign of weakness, not strength, by the Street,” Ives told the Post.

Josh White, a former financial economist for the Securities and Exchange Commission, told BBC that Musk’s negotiation tactics might not be the “right approach” if Musk wants to acquire the company.

“I actually think if he was truly serious about the takeover attempt, he would have started at a price and left the window open for negotiation,” White said.

Twitter ‘storm’?

Edward Rock, who teaches corporate law and governance at New York University’s law school, also had doubts about whether Musk was serious about buying Twitter.

As Rock told NPR, Musk can show he is serious by revealing how he plans to finance the takeover, which he did not show in his SEC filing, or launch a proxy contest to replace Twitter board members in response to its poison pill.

If Musk fails to do so, Rock said, “he’s not going to acquire the company, and people can just write it off like some of his other Twitter storms.”

Some information for this report came from The Associated Press.
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The World Health Organization says a variety of crises are adversely impacting the health of millions and blocking needed humanitarian aid in war-torn hotspots around the world.   

War, climate disasters, and COVID-19 are threatening global health and undermining the capacity to build and maintain economically viable and stable societies.  These multiple crises are most pronounced in war-torn countries.

Ukraine, a once thriving society, is now shattered. Since Russia invaded 51 days ago, thousands of civilians, including children, have been killed or injured.

The WHO has confirmed 119 attacks on health care personnel and facilities since the start of the war there.  WHO Director-General Tedros Adhanom Ghebreyesus said health services are severely disrupted, particularly in the east of the country, now the epicenter of the fighting.

“For the sake of humanity, I urge Russia to come back to the table and to work for peace,” he said. “In the meantime, humanitarian corridors must be established so that medical supplies, food, and water can be delivered, and civilians can move to safety.”  

On another front, the World Food Program says 4.6 million people in the embattled Tigray province of northern Ethiopia are suffering from acute hunger.  Hundreds of thousands reportedly are on the verge of famine.

The Ethiopian government called a humanitarian truce three weeks ago.  Despite this, WHO chief Tedros said a blockade, one of the longest in the country’s history, continues. Few life-saving supplies, he said, are reaching Tigray.

“In effect, the siege by the Ethiopian and Eritrean forces continues,” he said. “To avert the humanitarian calamity and hundreds of thousands more people from dying, we need unfettered humanitarian access from those reinforcing the siege.” 

Tedros warned the Horn of Africa and Sahel are at high risk of famine. He said conflict, years of drought, heavy flooding, and COVID-19 have destroyed peoples’ ability to cultivate the land, grow their crop and raise their cattle.  

He said many people are already starving and millions are on the move. He expressed concern about the impact this humanitarian crisis is having on peoples’ health and on regional security.
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Hours after announcing his $43 billion hostile takeover bid for Twitter, business magnate Elon Musk laid out some of his goals for the social media giant, including an edit button that would let users amend ill-considered tweets.

Musk made the comments on the concluding day of the annual TED Conference in Vancouver. In a question-and-answer session, he said Twitter is the global town square and an important and inclusive area for free speech.

He said he has enough assets to cover the $43 billion purchase himself but did not divulge details of how he expects to finance the attempted takeover. If necessary, he said, he has a “Plan B” for acquiring the company.

Musk said if successful, he will make Twitter’s algorithms open source, introduce an edit button for people to change their tweets and will work to “ban the bot armies,” or automated computer programs, from the platform. The edit option will be available for only a limited time after a tweet is sent, he said.

In answering questions from TED head curator and organizer Chris Anderson, Musk also said that when tweets are changed, all retweets and likes to the original message will be deleted.

Musk also indicated that under his control, Twitter would be more reluctant to delete tweets that are of questionable taste or veracity and that when in doubt, he would allow a tweet to exist. But the platform would follow the laws of the different countries where it exists, he said.

Musk also was harshly critical of the San Francisco office of the U.S. Securities and Exchange Commission, describing its staff as “those bastards.” The comment came in reference to fraud charges brought by the SEC regarding some 2,018 tweets that Musk sent claiming he had the funding to take his Tesla electric car company private.

In the settlement, Musk was forced to resign as chairman of Tesla, issue a $40 million payout to shareholders and have a lawyer approve his future tweets about the company. Musk said financial institutions forced him into the agreement, as if the SEC had been “holding a gun to your child’s head.” He agreed only to save the company, he said.

The 50-year-old entrepreneur, who also runs SpaceX and the Boring Company, announced the $43 billion takeover bid for Twitter just hours before arriving in Vancouver.

Last week, he purchased 9.2% of the company’s stock but subsequently turned down a seat on the company’s board of directors, which would have limited the amount he could own to 14.9%.

Musk said 2016 to 2018 were the worst years of his life, as Tesla encountered problems with the production of the Model 3. He said he now knows more about manufacturing than anybody on Earth after sleeping on the floors of assembly plants to work out the problems.

He also talked about building sustainable energy from wind, solar, hydro and geothermal, and repeated his support of nuclear power. He briefly talked about further developing robotic intelligence, saying the first robots to help people in everyday life are not far off. Musk said the robots will be affordable, but it should not be possible to update them remotely like computers or his Tesla vehicles.

Besides making these announcements in Vancouver, Musk has a personal tie to the city. The musician Grimes, whose real name is Claire Elise Boucher, is the mother of his two youngest children and grew up in the city, where she has family.
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