News/Commentary

Musk begins plan B, Twitter faces backlash for dropping ‘poison pill’

April 16, 2022 | | Print Article

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In a move that was predicted by many, Twitter has resorted to an extreme measure to prevent billionaire Elon Musk from taking over the social media giant.

On Friday, the board of directors voted to drop a “poison pill” despite the damage that such an action could bring, especially to shareholders who are clearly viewed as acceptable collateral damage if that’s what it takes to prevent the return of free speech.

Musk is reportedly speaking to private equity investors who could partner with him, sources told The New York Post.

It was a dramatic action that brings to mind the infamous Vietnam War-era quote that “We had to destroy the village in order to save it,” but these are desperate times for Democrats and their allies in Silicon Valley whose political woes could multiply exponentially if they lose the ability to maintain control over the narrative.

Twitter’s aggressive move likely violated the board’s fiduciary responsibility to shareholders and could bring a flood of lawsuits that could be biblical in nature, a possibility that Musk himself suggested.

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

The implications could definitely be “titanic,” as in RMS Titanic.

Investopedia describes a poison pill as follows:

“The term poison pill refers to a defense strategy used by a target firm to prevent or discourage a potential hostile takeover by an acquiring company. Potential targets use this tactic in order to make them look less attractive to the potential acquirer. Although they’re not always the first—and best—way to defend a company, poison pills are generally very effective.”

The SpaceX/Tesla CEO also spoke of a “Plan B” when asked if he has a fallback option during an interview at a TED conference in Vancouver on Thursday.

Twitter was absolutely buzzing after the company’s attempted checkmate of Musk.

Clay Travis of Outkick and the nationally syndicated Clay & Buck radio program wrote, “I am a long time @twitter shareholder. Today’s actions by the board violate their fiduciary duty to maximize shareholder returns and if they don’t lead to a sell of the company for over $54.20 will lead to monster lawsuits costing the company billions of dollars.”

“Twitter’s insiders essentially just decided to screw over their shareholders, crash their stock, and open the company up to massive lawsuits just to prevent Elon Musk from running Twitter in a way that won’t rig elections or censor their political opponents,” tweeted digital strategist Greg Price.

He added, “Even if Elon doesn’t end up buying Twitter, he just exposed the censorship regime in a major way. He’s an outsider who won’t play by their rules and they’ll even deliberately dilute shares (which should be illegal) to continue their campaign of mass information control.”

Other reactions poured in to the board’s decision to secure the censorship regime over the interests of shareholders.

On Friday evening, the New York Post reported that Musk could be considering bringing in partners for his bid to gain control of Twitter but details are sketchy as of this time.

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Chris Donaldson
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