Twitter Inc. moved to prevent Elon Musk from significantly increasing his stake, a day after he unveiled a $43 billion unsolicited takeover bid for the social-media company.
The Wall Street Journal reports the company on Friday adopted a so-called poison pill that makes it difficult for Musk to increase his stake beyond 15%. The billionaire founder of Tesla Inc. already owns a more-than 9% stake that he revealed earlier this month.
Poison pills, also called shareholder-rights plans, are legal maneuvers that make it hard for shareholders to build their stakes beyond a set point by triggering an option for others to buy more shares at a discount. They are often used by companies that receive hostile takeover bids to block an unwanted suitor or buy time to consider their options.
Twitter said in a statement that the rights plan doesn’t prevent the company from engaging with potential acquirers or accepting a takeover bid if the board determines it is in the best interest of shareholders. It earlier confirmed it received Mr. Musk’s offer and is reviewing it.
Meanwhile, Musk, who has been accused of harassment himself for the way he attacks his critics on Twitter, said efforts to minimize harm often undermine the expression of unpopular ideas, according to The Wall Street Journal.
“If in doubt, let the speech, let it exist,” Musk said Thursday during an interview at a TED conference in Vancouver. “If it’s a gray area, I would say let the tweet exist.”
Executives including Meta Platforms Inc. CEO Mark Zuckerberg have repeatedly said their position is the same—to err on the side of leaving content alone. The challenge is defining both the gray areas and the red lines that can’t be crossed.
Among his ideas for how to improve Twitter, Musk said, is that the social network’s algorithm should be open-sourced, meaning that its code could be available for study by outsiders. He also said any efforts to amplify or limit the reach of users’ tweets should be publicly documented.
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