Twitter preps poison pill to preclude Elon Musk's purchase plan
Populist provocateur ponders partners to pay for platform prize
Comment Twitter on Friday said its board of directors had unanimously approved a plan to prevent a hostile takeover, something that became a distinct possibility after billionaire Elon Musk offered $43 billion to buy the social media network.
The poison pill, or "Rights Plan," the biz said, "will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders."
The "Rights Plan" would require Musk to negotiate directly with the board to increase his share of the company beyond 15 percent. After that every existing shareholder, with the exception of Musk, would be able to buy Twitter stock at a discounted rate.
It adds an obstacle to a Musk takeover but doesn't preclude it. In fact, Musk is reportedly talking to potential financial partners who could help him consummate the deal.
Musk, CEO of Tesla and SpaceX, a self-described "free-speech absolutist" who once falsely labeled a British cave explorer a "pedo guy" on Twitter and then defeated the ensuing defamation claim, last month began buying up shares of Twitter. Previously he has suggested that somehow Twitter, through its content moderation, is limiting free speech.
That's just wrong – apart from the terms of the SEC settlement Musk signed that limit his freedom to post misleading tweets, but that's another story. The First Amendment of the US Constitution prevents the government from setting speech rules; it does not constrain how private-sector entities should treat lawful speech. Content moderation is necessary for social media platforms to function.
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Setting aside Musk's crowd-baiting pronouncements about freedom and speech, his quiet share purchases have spoken louder than tweeted provocations and have alarmed Twitter employees not sold on Musk's managerial benevolence. After revealing on April 4, 2022, that he'd acquired 9.2 percent of Twitter's shares, he was offered a seat on the company board, then declined it – perhaps because bad-mouthing Twitter and serving on its board presented a conflict of interest – and was subsequently sued by Twitter shareholders for delaying disclosure of its share purchases.
To hear Musk tell it, he wants to make some changes, such as deploying an edit button – a crowd-pleaser and something Twitter maintains it has been working on – and open-sourcing the algorithm that surfaces tweets – something relevant mainly for those who choose Twitter's algorithmically ranked Home view of tweets rather than the chronologically ranked Latest view.
"A top priority I would have would be eliminating the spam and scam bots and the bot armies that are on Twitter," he said during a TED conference interview on Thursday. He did not mention whether he would banish 60 percent of his own Twitter followers suspected to be fake or take action against the army of Tesla-boosting bots that reportedly have helped lift the automaker's stock.
Then again, everything changes
Musk's musings about what might be come with no guarantees.
During the Tesla boss's TED appearance, moderator Chris Anderson said, "Last week when we spoke, Elon, I asked you whether you were thinking of taking over [Twitter], you said, 'No way. I do not want to own Twitter. It is a recipe for misery. Everyone will blame me for everything.'"
Musk, without directly addressing that he had disavowed interest in Twitter, said he knows the process will be painful and he still wants to buy the company.
"It's important to the function of democracy," Musk said. "It's important to the function of the United States as a free country, and many other countries, and to help freedom in the world … I think civilizational risk is decreased the more we can increase the trust of Twitter as a public platform. I do think this will be somewhat painful and I'm not sure I will actually be able to acquire it."
Civilizational risk is hard to measure and it's not clear how Twitter content moderation compares to the AI apocalypse, a longstanding concern for Musk, or the COVID-19 pandemic, which has actually led to almost one million deaths in the US.
Keep in mind that this is the man who on March 6, 2020 tweeted, "The coronavirus panic is dumb," and has published numerous other tweets arguing against public health mandates that attempt to mitigate if not civilizational risk then national, corporate, and individual risk.
And speaking of painfulness earlier, former Reddit CEO Yishan Wong believes Musk will be in "a world of pain" if he buys Twitter, as the SpaceX supremo has no experience in handling a large-scale internet platform.
Anderson later asked Musk how he amassed so many followers on Twitter – even excluding the bots, the number of people following him is a lot.
"I'm tweeting more or less stream of consciousness," Musk answered. "It's not like, 'Let me think about some grand plan about my Twitter or whatever. I'm like literally on the toilet or something. I'm like, 'Oh this is funny,' and then tweet that out."
You know what would be funny? Twitter banning Musk, just for giggles. ®