Twitter's board of directors implements a "poison pill plan" to diminish its interest in the company in response to Musk's takeover effort.

Tesla founder Elon Musk (Elon Musk) announced last week that he intends to buy Twitter wholly, hoping to make Twitter a private company, forcing Twitter's major shareholders and board of directors to block Musk's acquisition plan.
Twitter's board of directors has announced the launch of what is commonly known in the market as a "poison pill" amid objections from investors including Prince Al Waleed Bin Talal, chairman of Twitter's major shareholder Kingdom Holding Company. ), an attempt to block Musk's acquisition of Twitter through a year-long shareholder equity plan.
The "poison pill plan" refers to the practice of issuing a large number of new shares to allow shareholders to buy more shares at a relatively low price , thereby diluting Musk's shareholding ratio and increasing the difficulty of Musk's acquisition of Twitter. . This means that if Musk wants to successfully acquire Twitter, it may cost at least 15% higher proportion, which is about $50 billion, and it may be possible for Twitter to accept it.
However, after Twitter launched the "Poison Pill Project", although it allowed other shareholders to buy more shares, it also gave Musk, who is a major shareholder of Twitter, another opportunity to buy more shares, and affected the stock price. The consequences are unpredictable .
In addition, Musk proposed to bid for the acquisition at a price of $54.2 per share, totaling about $43 billion. Although this amount is 25% higher than the current market value of Twitter, the Twitter board still believes that Musk’s bid is too low. At the same time, the market also believes that Unless Twitter itself has a financial shortfall, or believes that future growth is limited, Twitter is unlikely to accept the bid.
For Musk's big move to acquire Twitter, another focus of the market's attention is "Where did Musk get the funds to acquire Twitter"? Although Musk is currently the richest man in the world, most of the assets he holds are in fact non-movable properties such as Tesla and SpaceX stocks. It is impossible to directly acquire Twitter with existing liquid funds. If he wants to sell shares in other companies for cash, It may also cause doubts agitated by other companies or affect the company's stock price, etc. The subsequent chain impact is difficult to estimate.
The market also reported that Musk may cooperate with the private equity firm Silver Lake Investment Group, and may use the Silver Lake Investment Group to obtain sufficient funds to buy Twitter by threatening to restore Tesla's privatization model. In this regard, Yinhu Investment Group has not officially responded.

Source: New York Post, Twitter, bnext

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