Twitter has dropped a major roadblock in front of Elon Musk’s effort to take over the company, leaving investors to wonder about the mercurial Tesla CEO’s next move.
that makes it difficult for Musk or any other investor to buy Twitter without the board of directors’ approval. Musk, who currently owns about 9% of the company, last week disclosed an offer of about $43 billion, or $54.20 per share.
Although he said his offer was “final,” Musk may have to raise his bid to satisfy other shareholders. A Saudi prince who is among Twitter’s major shareholders scoffed at the offer last week in a tweet. Al Waleed bin Talal said he didn’t believe $43 billion is close to Twitter's value given its growth prospects. Twitter shares hit an all-time high of $77.63 in March 2021.
The poison pill essentially would spell the end of Twitter if Musk or another investor acquires 15% or more of the company, said James Cox, a professor of corporate and securities law at Duke University. If Musk triggered the poison pill, he risks wiping out much of the money he has invested in Twitter because his stake would be diluted, said Columbia University law professor Eric Talley. “You want to deter someone from deliberately triggering the poison pill,” Talley said.
Shares of Twitter closed Monday up 7.5% at $48.45, still $5.75 shy of Musk’s offer. That’s a sign that investors are skeptical of whether Musk can pull off the deal.Musk began accumulating Twitter shares in late January, ending up with a stake of about 9%. Only Vanguard Group controls more shares. A lawsuit filed last week in New York federal court alleged Musk illegally delayed disclosing his stake so he could buy more shares at lower prices.
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