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Twitter Takes the Poison Pill

Twitter Takes the Poison Pill

April 25, 2022
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Recently, you might have heard about Twitter using a “poison pill” option to fend off a hostile takeover. While it sounds like something a Wicked Queen would use in a fairy tale, the poison pill is not uncommon.

A hostile takeover happens when a company doesn’t want to change hands and takes measures to prevent it. The defensive move is the poison pill, a business strategy that makes the takeover more difficult or expensive. Such a move is usually part of a shareholder rights plan.

In the case of Twitter, the company plans to offer shareholders a discounted price on stock should a single entity purchase more than a 15% stake.  This was in response to Elon Musk making an offer to take the company private.  

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