Related news: Twitter officially launched the “poison pill” defense to resist Musk’s $43 billion hostile M & A

As expected, Twitter’s board of directors unanimously approved the launch of the “poison pill” on Friday to issue additional shares to current shareholders at a discounted price in an attempt to dilute Musk’s shares and resist the world’s richest man’s malicious acquisition plan.

However, twitter added that the plan would not affect the company’s contact with potential acquirers, and the board would accept an offer that was in the best interests of shareholders.

“Poison pill plan”, also known as “shareholder’s equity plan”, is a strategy for listed companies to resist malicious acquisition with a posture of killing the dead and breaking the net. In short, if the acquirer acquires a certain proportion in the open market, the target board of directors will issue preferred shares to existing shareholders and greatly dilute the acquirer’s shareholding ratio and voting rights, which is equivalent to making the acquirer swallow poison pills and forcing them to give up the acquisition plan.

Obviously, Twitter’s board of directors launched the poison pill plan to prevent Musk’s acquisition or force musk to increase its offer. However, since musk has said that $54.2 per share is the highest offer, he will not continue to bargain. Unless musk continues to increase the price, the two sides are unlikely to reach an agreement.

Musk is hard to get

Over the past two weeks, musk has played a “hard to get” game on twitter. He suddenly disclosed on Monday that he had purchased 73.5 million twitter common shares since January, with a shareholding ratio of 9.2%, becoming the largest shareholder of twitter. Twitter’s board of directors invited him to join the board the next day, on the condition that musk could not increase his stake by more than 15% and did not seek control.

Last Saturday was the day musk officially became a twitter director, but he suddenly informed twitter CEO Parag Agrawal again that he did not intend to join the twitter board. It is speculated that Musk’s intention to give up his entry into the twitter board is to fully acquire the company.

Sure enough, yesterday musk submitted regulatory documents again and announced that he planned to buy twitter entirely at the price of $54.2 per share, turning twitter into a non listed company. The offer valued twitter at $43 billion. This is the real purpose of his continuous acquisition of twitter shares.

Musk also attached to the document an invitation letter he wrote to BRET Taylor, the independent chairman of Twitter and co CEO of salesforce. The letter is very short, but very tough.

“I invested in twitter because I believe in its potential as a global platform for freedom of speech, and I believe that freedom of speech is the basis for the operation of democracy. But after investing, I now realize that twitter can neither prosper nor fulfill this mission under the current mechanism. Twitter needs to be transformed into a private company. Therefore, I plan to buy all shares of twitter in cash for $54.2 per share, which is a better offer than me The stock price premium before the investment is 54%, which is 38% higher than that before my public disclosure of the investment. This is my highest and final offer. If it is not accepted, I will reconsider my status as a shareholder. “

The core sentence of Quanxin is the last sentence, “Twitter has great potential, and I will unlock it.” This open letter has only 138 words in total, but there are 11 “I”. This plain spoken language and self-centered narrative style have many similarities with former US President trump, who even wrote the official announcement as a tweet.

He also attached a record of his correspondence with the twitter board, “As I said over the weekend, I believe twitter should go through the required change as a private company. After thinking over the past few days, I decided to buy twitter and privatize it. I won’t come back and forth. I intend to be straightforward. This is a high offer that your shareholders will like. If this offer doesn’t work, given my lack of confidence in management, I don’t believe I can promote the required change in the open market 。 I will reconsider my position as a shareholder. This is not a threat, but without the required changes, (taking a stake in twitter) is not a good investment. These changes cannot be accomplished without privatizing twitter. “

After Musk’s friend and twitter co-founder Jack Dorsay left his post at the end of November last year, musk has publicly criticized twitter for many times in the past few months, including specific product functions, the new CEO and the content audit standard of twitter.

On March 26, he publicly denounced that too strict content censorship on twitter had affected the cornerstone of freedom of speech, and hinted that he might consider launching a new social platform. Now it seems that that’s just Musk’s warm-up for his acquisition of twitter. In fact, before his public shelling, musk had become the largest shareholder of twitter.

The shareholders do not accept the offer

Although Musk’s overall assets exceed $270 billion and Twitter’s current market value is only $35 billion, money can’t buy everything. Twitter is not what he wants to buy. In fact, from the board of directors to management to employees to shareholders, neither inside nor outside twitter welcomes Musk’s acquisition and is unwilling to become the world’s richest private company.

At least Twitter’s existing shareholders are not interested in his offer. Musk’s offer is $54.2 per share. Although he believes it is 38% higher than before he disclosed his shareholding, the current twitter share price is $45, with a premium of only 20%. And now Twitter’s share price is at a low point, once as high as $77 at the beginning of last year. Investors are obviously unwilling to sell their shares at this price.

Musk’s overall offer for Twitter is $43 billion, excluding 9.2% of his existing stake, which is equivalent to about $39 billion. In addition, twitter had a cash position of $2.21 billion at the end of last year. This means that musk actually only wants to spend another $37 billion. This price obviously can not meet the expectations of investors.

After Musk’s bid, Al Waleed bin Talal, chairman of the board of directors of Saudi kingdom holding company (KHC), the main investor of twitter, publicly said that Musk’s