Twitter uses financial maneuvering to avoid purchase by Elon Musk

 Twitter's board of directors has used a well-known stock market move to prevent the complete takeover of the company formalized last week by the world's current richest person, entrepreneur Elon Musk.

Just last Friday (15), the members unanimously approved a temporary change in the rules that reduces the chances that a single person will immediately or gradually gain control of an entire publicly traded company.

Under Twitter's new policy, if any investor buys at least 15% of the shares without prior board approval, other shareholders can buy a larger percentage at a lower than conventional price. 

This move does not necessarily prevent the purchase, but it may reduce the willingness of other entrepreneurs to negotiate their share. This special situation is valid at least until April 14, 2023.

The poison pill

Twitter's new plan is already quite traditional in the financial world: it is a "poison pill".

The name derives from the technique of spies carrying poison pills in case they were caught, to prevent them from being arrested and interrogated. In this case, the metaphor involves a company that starts to trust investors so that they are not lured away by a forced full takeover offer.

Musk's offer is $43 billion for the entire controlling interest in Twitter. Before that, he acquired 9.2% of the company and was invited to join the board, but dropped out - possibly so that he could expand his percentage in the social network.