The Board of Directors for Twitter is looking to act defensively in reaction to Elon Musk's proposed takeover of the social media platform, with a plan to take the platform private and make free speech a priority.
The board announced that they would be meeting on Thursday after Musk publicly stated his intention to buy, saying that it was his "best and final" offer. A source told The New York Times that the board is trying to design whether or not to move ahead with a shareholder rights plan "that would limit the ability of a single shareholder" to acquire an excess amount of stock, forcing the company into a sale.
This is a tactic used by companies in an attempt to thwart what's known as a hostile takeover of a company, where the company could create new shares that would limit the value of existing shares.
Musk does have the ability to directly reach out to shareholders to buy more stock if the board rejects his bid. Musk also said on Thursday, in an interview with TED2022, that he has a plan B, though he would not elaborate on what that was.
The New York Times reports that shareholders are concerned that Musk does not have the capital for the investment, though he has said outright that he is able to fund the buy. Musk would prefer a situation where shareholders stay with the company and work with him to bring the platform more in line with free speech laws.
Musk said that the shareholders should be given a vote. And in fact, he offered a more than a fair price per share, over $54.
Absolutely. It would be utterly indefensible not to put this offer to a shareholder vote. They own the company, not the board of directors.
— Elon Musk (@elonmusk) April 14, 2022
As the day wore on, Vanguard made a stock buy of their own, eclipsing Musk as the largest shareholder of the social media giant.
Both Jack Dorsey and current Twitter CEO Parag Agrawal are on the board, along with board chair Bret Taylor, to whom Musk addressed his offer of a buyout of the company on Wednesday evening.
Musk was invited to join the board after he made a large stock buy over the weekend, but declined the offer after it was revealed that he would have limited power as a board member to implement the changes he'd like to make on the platform, namely to allow for more free speech and transparency on Twitter.
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