Twitter Stock Edges Lower as Poison Pill Blunts Attack from Musk and Others
2022.04.19 12:51
By Geoffrey Smith
Investing.com — Twitter (NYSE:TWTR) stock fell slightly in premarket trading on Tuesday, giving up some of the gains made on Monday in response to reports of private equity interest in the beleaguered social media company.
By 5:10 AM ET (0910 GMT), Twitter stock was down 1.2%, having risen 7.5% after Dow Jones reported that Apollo Global Management (NYSE:APO) has considered getting involved in the battle for control of the company. Reuters had reported possible interest also on the part of Thoma Bravo.
Twitter’s board last week rejected a hostile $43 billion approach from Tesla (NASDAQ:TSLA) CEO Elon Musk, and also voted through a ‘poison pill’ defense mechanism that would stop Musk from raising his stake over 15%. However, the board could be forced to engage with Musk if enough shareholders come out in support of him.
Musk had announced earlier in April that he had built a ‘passive’ stake of 9.2% in the company, but rejected the offer of a board seat after failing to find common ground with management on a future strategy.
Musk has railed against the company’s perceived ‘censorship’ of non-mainstream voices and styled his takeover plans as a defense of free speech. However, former Reddit CEO Yishan Wong said in a viral Twitter thread at the weekend that Musk underestimates the need to moderate content and the difficulty of the task. He warned Musk against a takeover.
“I can’t decide if I prefer Very Interesting Tech Hero Elon to take over Twitter, or if Very Heroic Space Adventurer Elon shouldn’t be wasting his time trying to fix Internet flamewars,” Wong noted.
Wong also highlighted the tension between the conflicting aims of Musk and existing Twitter shareholders.
“Do we think the problem is that Twitter is not making enough money, or that Twitter is not sufficiently upholding free speech?” Wong argued. “How sure are we that achieving those two goals are tightly correlated?”
