Twitter’s attempts to stop entrepreneur Elon Musk, the world’s richest man, from buying the company by adopting a so-called “poison pill” defense may not be enough to stop Musk from succeeding in his quest to take over the company.
A “poison pill” effectively allows all shareholders, except those trying to buy out the company, to purchase newly offered shares at a discounted price. Musk would have to purchase the new shares at a higher price, which could end up being too much for him to afford, if he wanted to takeover the company.
The Washington Post reported:
Despite throwing a massive roadblock in Musk’s way, the adoption of the poison pill would not bar Musk from being able to buy the company, it would only make it harder.