Soon after Twitter adopted a “poison pill” to protect itself from Elon Musk’s takeover bid, the Tesla CEO took a swipe at its board with a tweet. He said that the salary of the members of the board will be $0 if his bid succeeds.
“Board salary will be $0 if my bid succeeds, so that’s ~$3M/year saved right there,” Musk said in response to another Twitter user.
A ‘poison pill’ is a strategy used by companies when the company floods the market with shares or gives existing shareholders the right to purchase stocks at a discount to dilute the stake of the bidder and make the purchase of the entire company’s stock much more expensive. The shareholder who triggers the poison pill will be blocked from making these discounted stock purchases. Twitter’s poison will stay in place for one year.
Musk had recently bought a 9.1 percent stake in Twitter before making an unsolicited offer of $43 billion to buy the company and take it private. Musk is the second-biggest shareholder in Twitter, behind Vanguard Group which has only recently increased its stake to 10.2 percent.
Musk has said that the takeover bid is not for an economical or business purpose but about enshrining free speech on the platform. A self-described “free speech absolutist”, Musk wants Twitter to be a beacon of free speech despite being a private social media platform.
Musk has been critical of the board’s decision regarding his bid, even asking his 80-million strong following on Twitter whether “taking Twitter private at $54.20 should be up to shareholders, not the board”.
However, Musk is also aware that his plan of buying Twitter may not turn out as he expects. Therefore, he has a plan B ready.
“I am not sure that I will actually be able to acquire it,” the billionaire said on Thursday at a TED event in Vancouver.
Twitter founder and former CEO Jack Dorsey also slammed the Twitter board by saying that the board has “consistently been the dysfunction of the company.” He stated “big facts” in response to another Twitter user sharing a quote from investor of Fred Destin which stated that a bad board of directors could “kill” a company.