Billionaire tech entrepreneur Elon Musk has run into some serious opposition in response to his bid to purchase Twitter and reform the social media platform into a bastion of free speech it was once ostensibly supposed to be.
The concerted blockade erected against Musk’s effort has led some to suggest that the “game is rigged,” and Musk himself appeared to agree with that assessment Saturday, Fox Business reported.
Musk’s agreement with that sentiment came in the aftermath of the news that the Twitter board of directors had adopted a “poison pill” plan to block his purchase offer as well as that he had been supplanted as the largest shareholder of the platform by the Vanguard Group investment fund.
The “game is rigged”
Amid all of the back and forth this week about Musk’s attempt to obtain control of Twitter, venture capitalist firm Craft Ventures co-founder David Sacks tweeted Thursday, “If the game is fair, Elon will buy Twitter. If the game is rigged, there will be some reason why he won’t be able to. We’re about to find out how deep the corruption goes.”
“Indeed,” Musk replied two days later — after the Twitter board had clearly rejected his $43 billion acquisition offer by adopting a “poison pill” plan specifically designed to box out Musk and prevent him from gaining a controlling stake in the company.
— Elon Musk (@elonmusk) April 16, 2022
Twitter swallows “poison pill” to block Musk takeover
According to CNBC, the Twitter board announced Friday that it had adopted a limited duration shareholder rights plan that would last for one year and be triggered if any one individual or entity obtained a 15 percent stake in the company.
Once that occurred, the board would then offer a special discount on newly created shares to all other shareholders while freezing out the shareholder that triggered the plan from purchasing any additional shares. In that way, the purportedly “hostile” takeover would be blocked and the company’s value diluted.
That was not the first attempt by Twitter to rig the game in a manner to prevent Musk from gaining control, as it had initially offered him a spot on the board after Musk had obtained a 9.2 percent stake in the company.
That offer was made in bad faith, though, as Musk’s ownership stake would thus have been capped at 14 percent if he had accepted the board position and he would have become just another board member with little actual individual control over the company.
Vanguard Group replaces Musk as the largest shareholder
Nor does it appear that the Twitter board is alone in attempting to fend off a takeover by Musk, as Business Insider reported this week that investment fund Vanguard Group revealed this week that it had obtained a 10.3 percent stake in Twitter, supplanting Musk as the largest overall shareholder, though Musk still retained his spot as the biggest individual shareholder with his 9.2 percent stake.
To be sure, while it certainly appears that the “game is rigged” against Musk, the game isn’t quite over just yet, as Musk acknowledged in an interview this week the possibility that his purchase attempt would be unsuccessful but added without elaboration that there was a “Plan B” in place if the initial effort failed.