{"id":15066,"date":"2022-07-15T11:57:36","date_gmt":"2022-07-15T11:57:36","guid":{"rendered":"https:\/\/zeru.com\/blog\/?p=15066"},"modified":"2022-07-15T11:57:36","modified_gmt":"2022-07-15T11:57:36","slug":"what-is-the-twitter-poison-pill","status":"publish","type":"post","link":"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill","title":{"rendered":"What is the Twitter Poison Pill?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_43 counter-flat ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69ebf0810936c\" class=\"cssicon\"><span style=\"display: flex;align-items: center;width: 35px;height: 30px;justify-content: center;direction:ltr;\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/label><label for=\"ez-toc-cssicon-toggle-item-69ebf0810936c\"  class=\"cssiconcheckbox\">1<\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69ebf0810936c\" ><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill\/#What_is_the_Twitter_Poison_Pill\" title=\"What is the Twitter Poison Pill?\">What is the Twitter Poison Pill?<\/a><\/li><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill\/#Tweet\" title=\"Tweet\">Tweet<\/a><\/li><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill\/#Tweets_poison_pill\" title=\"Tweet&#8217;s poison pill\">Tweet&#8217;s poison pill<\/a><\/li><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill\/#Tweets_rights_plan\" title=\"Tweet&#8217;s rights plan\">Tweet&#8217;s rights plan<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"What_is_the_Twitter_Poison_Pill\"><\/span>What is the Twitter Poison Pill?<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p> <img decoding=\"async\" style=\"max-width:42% width:auto; margin:0px 10px; height:auto; max-height:317px;\" alt=\"what is the twitter poison pill\" align=\"right\" src=\"https:\/\/i.imgur.com\/kogGmhZ.jpg\"> <\/p>\n<p>Elon Musk has made headlines recently after revealing that he owns 9 percent of Twitter. This revelation sent shockwaves through Silicon Valley. Musk, a billionaire and CEO of SpaceX and Tesla, has also taken to polling Twitter users about whether Twitter should be shut down and proposed a new social media company. The reaction has been mixed. Some say Twitter should stay the same while others want it to become even more influential.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Tweet\"><\/span>Tweet<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The Twitter poison pill is a common defense strategy used by publicly traded companies under similar circumstances. It essentially forces a company to issue new shares in response to an activist investor&#8217;s purchase. All shareholders except Musk would be entitled to purchase this new stock at a discount. This method would impose a substantial penalty on a 15% takeover. It is worth noting that Twitter&#8217;s new stock would be sold at a discounted price.<\/p>\n<p>While Silver Lake has not sought to make a bid of their own, it could end up being a buyer for the company. It did not immediately respond to a request for comment. In a separate development, Thoma Bravo is also considering a bid for Twitter. While the latest information on Twitter is scarce, Silver Lake is already one of the most prominent private equity investors in the world. If Twitter accepts its offer, the deal would be a significant win for the company.<\/p>\n<p>The Tweet poison pill was reported on Monday. The company&#8217;s board has reportedly sought financial advice from Goldman Sachs Group Inc. and JPMorgan Chase Co. &#8211; two firms that have long acted as financial advisers to Twitter. Bloomberg News reported that the two firms are pursuing a merger of equals. A merger would create a new competitor, but it also increases Twitter&#8217;s valuation. Twitter&#8217;s stock price has fallen by more than half in a year. A takeover would require a disproportionate amount of cash, and it could be dangerous if the buyout is too big.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Tweets_poison_pill\"><\/span>Tweet&#8217;s poison pill<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A legal firm devised the &#8220;poison pill&#8221; strategy in 1982. The method was used to protect spies from enemy interrogation. The method has resurfaced in the tech world, as companies like Facebook and Twitter want to acquire them. The wealthy have long sought influence in the news media, and they often buy them. In 2013, Jeff Bezos bought the Washington Post. Now, Twitter has taken a similar approach to avoid hostile takeovers.<\/p>\n<p>Twitter&#8217;s poison pill plan has already been the subject of a legal battle. Elon Musk, the CEO of Tesla and SpaceX, recently announced a surprise $43 billion takeover bid for Twitter. This move ruffled Twitter board members and led to a &#8220;poison pill&#8221; response. The Twitter board interpreted the plan as trying to prevent Elon Musk from acquiring the company. The poison pill is valid only as long as the offer is made on April 14, 2023.<\/p>\n<p>Twitter resorted to a strategy developed by companies in the 1980s: the poison pill. This tactic allows existing shareholders to purchase new shares at a discount in order to dilute the interests of the newly hostile shareholder. However, it&#8217;s unclear how Musk&#8217;s move will affect Twitter&#8217;s share price. Musk did not respond to an NPR request for comment, but said he has a &#8220;Plan B&#8221; in case the takeover fails.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Tweets_rights_plan\"><\/span>Tweet&#8217;s rights plan<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The rights plan that Twitter has in place will enable holder&#8217;s to purchase additional shares of the company&#8217;s common stock in certain circumstances, such as when a hostile party has a 15% stake. Under the plan, the board will have to approve a share purchase if a hostile party owns more than 15% of the company. However, Twitter&#8217;s rights plan does not prevent the board from engaging with any interested party or accepting an acquisition proposal.<\/p>\n<p>The rights plan outlined by the board is designed to prevent one person from acquiring control of the company. It would prevent a hostile takeover and allow the current board more time to evaluate potential acquisition proposals. This structure is known as a &#8220;poison pill&#8221; because it allows a current shareholder to acquire new shares for a discount and dilute the ownership of the acquiring party. This Twitter rights plan would trigger when Musk gets at least a 15% stake in the company. The exercise price is $210, and holders can then buy common shares with a current market value of twice the exercise price.<\/p>\n<p>The board of directors of Twitter have voted unanimously to adopt a &#8216;poison pill&#8217;-like plan that enables other Twitter shareholders to purchase more shares at a discount. This plan allows Twitter to negotiate with Musk and may delay the takeover. If the company does accept Musk&#8217;s offer, however, it may be able to negotiate with him to keep his stake small. In the meantime, Twitter&#8217;s rights plan allows it to take the time needed to decide on the offer to accept.<\/p>\n<p> <iframe width=\"460\" src=\"https:\/\/www.youtube.com\/embed\/SGrqEtpAURs\" allowfullscreen=\"true\" frameborder=\"0\" height=\"257\" style=\"margin:0px auto; display: block;\"><\/iframe><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is the Twitter Poison Pill? Elon Musk has made headlines recently after revealing that he owns 9 percent of Twitter. This revelation sent shockwaves through Silicon Valley. Musk, a billionaire and CEO of SpaceX and Tesla, has also taken to polling Twitter users about whether Twitter should be shut down and proposed a new [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":15753,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v19.7 (Yoast SEO v21.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is the Twitter Poison Pill? - Zeru<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is the Twitter Poison Pill?\" \/>\n<meta property=\"og:description\" content=\"What is the Twitter Poison Pill? Elon Musk has made headlines recently after revealing that he owns 9 percent of Twitter. This revelation sent shockwaves through Silicon Valley. Musk, a billionaire and CEO of SpaceX and Tesla, has also taken to polling Twitter users about whether Twitter should be shut down and proposed a new [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill\" \/>\n<meta property=\"og:site_name\" content=\"Zeru\" \/>\n<meta property=\"article:published_time\" content=\"2022-07-15T11:57:36+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/zeru.com\/blog\/wp-content\/uploads\/What-is-the-Twitter-Poison-Pill_15066.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2151\" \/>\n\t<meta property=\"og:image:height\" content=\"1393\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Lizzie Yates\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Lizzie Yates\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill\",\"url\":\"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill\",\"name\":\"What is the Twitter Poison Pill? - Zeru\",\"isPartOf\":{\"@id\":\"https:\/\/zeru.com\/blog\/#website\"},\"datePublished\":\"2022-07-15T11:57:36+00:00\",\"dateModified\":\"2022-07-15T11:57:36+00:00\",\"author\":{\"@id\":\"https:\/\/zeru.com\/blog\/#\/schema\/person\/61005d9ec00b94bc50fbaf11b78aa55e\"},\"breadcrumb\":{\"@id\":\"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/zeru.com\/blog\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"What is the Twitter Poison Pill?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/zeru.com\/blog\/#website\",\"url\":\"https:\/\/zeru.com\/blog\/\",\"name\":\"Zeru\",\"description\":\"Blog\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/zeru.com\/blog\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/zeru.com\/blog\/#\/schema\/person\/61005d9ec00b94bc50fbaf11b78aa55e\",\"name\":\"Lizzie Yates\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/zeru.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/zeru.com\/blog\/wp-content\/uploads\/19-150x150.jpg\",\"contentUrl\":\"https:\/\/zeru.com\/blog\/wp-content\/uploads\/19-150x150.jpg\",\"caption\":\"Lizzie Yates\"},\"description\":\"A content marketing strategist with the Zeru team for a little over 5 years, Lizzie Yates specializes in everything digital media with a particular focus on social media and technology. Her passion? To follow how the social media sites like Instagram, YouTube, Facebook, Twitter, and TikTok are maturing over time, and what businesses can do to keep up. She shares her insights on our blog in a true outpouring of knowledge and expertise. Her knowledge about technology and social media is vast, and she is always willing to share her insights with businesses to help them stay up-to-date with the latest trends.\",\"url\":\"https:\/\/zeru.com\/blog\/author\/writer\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"What is the Twitter Poison Pill? - Zeru","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill","og_locale":"en_US","og_type":"article","og_title":"What is the Twitter Poison Pill?","og_description":"What is the Twitter Poison Pill? Elon Musk has made headlines recently after revealing that he owns 9 percent of Twitter. This revelation sent shockwaves through Silicon Valley. Musk, a billionaire and CEO of SpaceX and Tesla, has also taken to polling Twitter users about whether Twitter should be shut down and proposed a new [&hellip;]","og_url":"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill","og_site_name":"Zeru","article_published_time":"2022-07-15T11:57:36+00:00","og_image":[{"width":2151,"height":1393,"url":"https:\/\/zeru.com\/blog\/wp-content\/uploads\/What-is-the-Twitter-Poison-Pill_15066.jpg","type":"image\/jpeg"}],"author":"Lizzie Yates","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Lizzie Yates","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill","url":"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill","name":"What is the Twitter Poison Pill? - Zeru","isPartOf":{"@id":"https:\/\/zeru.com\/blog\/#website"},"datePublished":"2022-07-15T11:57:36+00:00","dateModified":"2022-07-15T11:57:36+00:00","author":{"@id":"https:\/\/zeru.com\/blog\/#\/schema\/person\/61005d9ec00b94bc50fbaf11b78aa55e"},"breadcrumb":{"@id":"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/zeru.com\/blog\/what-is-the-twitter-poison-pill#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/zeru.com\/blog"},{"@type":"ListItem","position":2,"name":"What is the Twitter Poison Pill?"}]},{"@type":"WebSite","@id":"https:\/\/zeru.com\/blog\/#website","url":"https:\/\/zeru.com\/blog\/","name":"Zeru","description":"Blog","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/zeru.com\/blog\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/zeru.com\/blog\/#\/schema\/person\/61005d9ec00b94bc50fbaf11b78aa55e","name":"Lizzie Yates","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/zeru.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/zeru.com\/blog\/wp-content\/uploads\/19-150x150.jpg","contentUrl":"https:\/\/zeru.com\/blog\/wp-content\/uploads\/19-150x150.jpg","caption":"Lizzie Yates"},"description":"A content marketing strategist with the Zeru team for a little over 5 years, Lizzie Yates specializes in everything digital media with a particular focus on social media and technology. Her passion? To follow how the social media sites like Instagram, YouTube, Facebook, Twitter, and TikTok are maturing over time, and what businesses can do to keep up. She shares her insights on our blog in a true outpouring of knowledge and expertise. Her knowledge about technology and social media is vast, and she is always willing to share her insights with businesses to help them stay up-to-date with the latest trends.","url":"https:\/\/zeru.com\/blog\/author\/writer"}]}},"_links":{"self":[{"href":"https:\/\/zeru.com\/blog\/wp-json\/wp\/v2\/posts\/15066"}],"collection":[{"href":"https:\/\/zeru.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zeru.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zeru.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/zeru.com\/blog\/wp-json\/wp\/v2\/comments?post=15066"}],"version-history":[{"count":1,"href":"https:\/\/zeru.com\/blog\/wp-json\/wp\/v2\/posts\/15066\/revisions"}],"predecessor-version":[{"id":15070,"href":"https:\/\/zeru.com\/blog\/wp-json\/wp\/v2\/posts\/15066\/revisions\/15070"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zeru.com\/blog\/wp-json\/wp\/v2\/media\/15753"}],"wp:attachment":[{"href":"https:\/\/zeru.com\/blog\/wp-json\/wp\/v2\/media?parent=15066"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zeru.com\/blog\/wp-json\/wp\/v2\/categories?post=15066"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zeru.com\/blog\/wp-json\/wp\/v2\/tags?post=15066"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}