London Daily

Focus on the big picture.
Wednesday, Jul 22, 2026

What is Twitter’s ‘poison pill’ and what is it supposed to do?

What is Twitter’s ‘poison pill’ and what is it supposed to do?

On Friday, Twitter’s board showed it will not go quietly after Musk offered to buy the company.

Twitter is trying to thwart billionaire Elon Musk’s takeover attempt with a “poison pill”, a financial device that companies have been wielding against unwelcome suitors for decades.

On Thursday, Musk offered to buy Twitter with the revelation coming just days after the Tesla CEO said he would no longer be joining the social media company’s board of directors.

He offered $54.2 per share of Twitter’s stock, calling the price his best and final offer.

On Friday, Twitter’s board showed it will not go quietly, saying any acquisition of more than 15 percent of the firm’s stock without its approval would trigger a plan to flood the market with shares and thus make a buyout much harder.

What are poison pills supposed to do?


The ingredients of each poison pill vary, but they are all designed to give corporate boards an option to flood the market with so much newly created stock that a takeover becomes prohibitively expensive.

The strategy was popularised in the 1980s when publicly held companies were being stalked by corporate raiders such as Carl Icahn – now more frequently described as “activist investors”.

Twitter did not disclose the details of its poison pill on Friday but said it would provide more information in a forthcoming filing with the Securities and Exchange Commission, which the company delayed because public markets were closed on Friday.

Musk currently holds a roughly 9 percent stake.

Can a poison pill be a negotiating ploy?


Although they are supposed to help prevent an unsolicited takeover, poison pills also often open the door to further negotiations that can force a bidder to sweeten the deal.

If a higher price makes sense to the board, a poison pill can simply be cast aside along with the acrimony it provoked, clearing the way for a sale to be completed.

True to form, Twitter left its door open by emphasising that its poison pill will not prevent its board from “engaging with parties or accepting an acquisition proposal” at a higher price.

Adopting a poison pill also frequently results in lawsuits alleging that a corporate board and management team is using the tactic to keep their jobs against the best interests of shareholders.


How did Musk react to Twitter’s announcement?


Musk, with 82 million followers on Twitter, had no immediate reaction to the company’s poison pill.

But on Thursday he indicated he was ready to wage a legal battle.

“If the current Twitter board takes actions contrary to shareholder interests, they would be breaching their fiduciary duty,” Musk tweeted. “The liability they would thereby assume would be titanic in scale.”

Musk has publicly said his $43bn bid is his best and final offer for Twitter, but other corporate suitors have made similar statements before ultimately upping the ante.

With an estimated fortune of $265bn, Musk would seem to have deep enough pockets to raise his offer, although he is still working out how to finance the proposed purchase.

Musk also questioned Saudi Arabia’s role in Twitter Inc after the kingdom’s Prince Alwaleed bin Talal tweeted his opposition to the billionaire entrepreneur’s offer to buy the social media company.

The prince tweeted on Thursday that Musk’s offer does not come close to the “intrinsic value” of Twitter.

“Being one of the largest & long-term shareholders of Twitter, @Kingdom_KHC & I reject this offer,” the prince said, referring to the Saudi Arabia-based Kingdom Holding Company, which he owns.

Musk responded to the tweet, asking how much of Twitter, directly and indirectly, was owned by Saudi Arabia.

“What are the Kingdom’s views on journalistic freedom of speech?” Musk added.


Newsletter

Related Articles

0:00
0:00
Close
Northern Ireland Secures Additional Infrastructure Funding From UK Treasury
Wales Approves Port Investment Plans to Support Green Energy Supply Chains
UK Financial Regulator Simplifies Stock Market Rules to Attract More Listings
UK Reports Decline in Small Boat Crossings Across the English Channel
UK Government Creates Emergency Support Fund for Financially Pressured Universities
Scottish Government Launches Economic Strategy Focused on Innovation and Renewable Industries
UK Expands Sustainable Farming Incentives to Support Environmental Measures
UK Government Introduces New Neighbourhood Policing Standards Across England and Wales
UK Competition Regulator Opens Review of Artificial Intelligence Foundation Models
UK Deepens Indo-Pacific Security Cooperation After Talks With Singapore and Japan
UK Announces Rail Modernisation Plan for Northern England With New Infrastructure Funding
UK Government Updates Housing Planning Rules to Accelerate Residential Construction
UK Approves Major North Sea Offshore Wind Project to Support Clean Power Goals
UK Health Service Begins Major Digital Upgrade to Cut Hospital Waiting Times
Bank of England Holds Interest Rates Steady as UK Inflation Pressures Remain Persistent
UK Universities and Industry Expand Space and Defense Research Partnerships
House of Lords Approves Social Housing Bill Amendments on Shared Ownership Rights
House of Lords Advances Civil Aviation Bill With New Passenger Protection Measures
UK Government Suspends Tariffs on Fertilizer and Food Imports to Reduce Costs
Russell Group Universities Support New UK Business Department Focused on Innovation
UK Parliament Opens Inquiry Into Transport Barriers Facing Young Jobseekers
Home Builders Federation Calls for Lower Costs as New UK Government Sets Housing Priorities
Andy Burnham Meets UK Devolved Leaders to Strengthen Regional Cooperation
Andy Burnham Holds First International Calls With Trump, Macron, and Zelenskyy
Andy Burnham Reshuffles Cabinet With John Healey Appointed Chancellor of the Exchequer
Andy Burnham Government Removes VAT From Electricity Bills to Cut Household Costs
Andy Burnham Becomes United Kingdom Prime Minister After Sir Keir Starmer Resigns
Miliband Sets Climate and International Law at Centre of UK Diplomacy
US Gasoline Returns to $4 as Renewed Iran Fighting Disrupts Oil Flows
Czech Central Bank Governor Rejects Early Euro Entry and Rate-Cut Pressure
Trump Orders 50% Tariffs on Selected Canadian Imports
Pentagon Discloses Nearly 100 US Troop Injuries During Renewed Iran Fighting
Trump Readies New Tariffs as Temporary Global Levy Nears Expiry
US Judge Pauses Paramount Skydance and Warner Bros Discovery Merger Over Antitrust Concerns
NHS England Faces Growing Retention Pressure Among Younger Midwives
UK Data Centre Expansion Faces Water and Grid Capacity Challenges
UK Defence Shares Rise After John Healey Appointment and Continued Spending Commitments
OECD Urges UK Government to Review Pension Triple Lock to Protect Public Finances
Bank of England Keeps Cautious Approach as Energy Costs Threaten Inflation Progress
County Councils Call for Wider Devolution and Long-Term Social Care Funding Reform
IMF Urges UK Government to Maintain Fiscal Discipline as Growth Forecast Slows
Russian Warship Holds Live-Fire Exercises Near UK Coast as Royal Navy Monitors Activity
Mitie Agrees Three Point One Billion Pound Takeover by OCS in Another Blow to London Listings
JPMorgan Chase Warns Bank Levies Could Hit UK Growth and Drive Capital Away
UK Unemployment Holds at Four Point Nine Percent as Labour Market Shows Resilience
UK Government Borrowing Falls Below Forecasts as Treasury Receives Early Fiscal Boost
John Healey Cuts VAT on Household Electricity Bills After Cancelling National Digital ID Scheme
Andy Burnham Forms New Labour Government With Ten-Year National Renewal Plan
EU Imposes Record €550 Million Digital Services Fine on AliExpress
UK Publishes Updated Consumption-Based Carbon Emissions Data
×