BY Fast Company 3 MINUTE READ

Elon Musk’s $43 billion hostile takeover attempt of Twitter might be one of the most-expected “surprise” acquisition offers in recent history. After Musk said he would, then wouldn’t, join the company’s board, Twitter CEO Parag Agrawal warned investors of “distractions ahead.” And analysts grabbed their popcorn.

So, Thursday’s bid wasn’t unanticipated, but that didn’t stop it from becoming a circus. Twitter shareholders don’t know what to think. The stock saw notable gains pre-market Thursday, topping $48 per share, before ending the day down 1.7% to just over $45. Analysts contradict each other, with Gene Munster of Loup Ventures telling CNBC, “It probably happens,” and Ben Laidler, global markets strategist at eToro telling Reuters, “This opens a battle for control between [Agrawal and Musk].”

Even other entrepreneurs, like Mark Cuban, chimed in, saying, “I think Twitter will do everything possible not to sell the company. They will try to get a friendly to come in and buy Elon’s shares and get him out.”

Heck, even Musk said, “I’m not sure I’ll be able to acquire it,” at a TED event on Thursday afternoon. He also cryptically said there was a “Plan B” if this takeover offer didn’t go through, but declined to elaborate.

Whether or not Musk is serious in his attempt to buy Twitter, the action certainly puts the social media company in play. And if it wants to fend off Musk—or whomever comes next—Twitter has a few options available to it, including simply rejecting the offer outright (though that could lead to shareholder lawsuits if they feel the company has not acted in their best interest).


This is the most familiar anti-takeover method for most people. First used in 1982, the controversial defense dilutes shares, reducing shareholders’ ownership in the company, to the extent that hostile bidders can’t gain a controlling share in the company without spending a lot more than they had planned.

Unfortunately, it’s not just the acquirer who gets frustrated. Common shareholders also see their holdings diluted, which tends to alienate institutional investors.

There are some alternate poison pills, as well. A “flip-in pill” lets the company issue preferred shares to existing shareholders (though that might not help, given the fact that Musk already holds more of the company’s stock than anyone else). A “flip-over pill” lets shareholders buy the acquirer’s shares at a discounted price. Netflix used this against Carl Icahn in 2012.

The Wall Street Journal, on Thursday afternoon, reported the company is, in fact, weighing a poison pill that would address the Musk offer. (Update: On Friday, Twitter announced it would adopt a poison pill strategy that would kick in if an individual or group were to acquire 15% of the company without board approval.)


Some companies look to put an end to hostile takeovers by catering to the demands of the potential acquirer. In Musk’s case, that would include an edit button, no ads on Twitter Blue, Dogecoin acceptance, and doing away with crypto spam bots. The idea is to acquiesce to the demands before the takeover fight is underway. At this point, it’s obviously too late for that. And given Musk’s history of erratic behavior, even if Twitter relented to some of the things the Tesla cofounder and CEO has grumbled about, it wouldn’t necessarily stave off the offer.


Musk has said his offer is his “last and final” one, and he had no intention to increase it. That may or may not be true, but one way to test it would be for Twitter’s board to find another interested buyer, ideally one whose vision for the future of the company matches that of the board of directors.

But . . . finding someone ready to spend more than $43 billion, who also respects the company’s plans for its future, is a lot easier said than done.


Musk owns 9.2% of Twitter’s shares, but the company could conceivably repurchase them at a premium. That would, in theory, eliminate the takeover attempt, but it’s pricey—and it has fallen out of favor with many companies, since it carries some capital gains tax implications, as well. Also, there’s no guarantee Musk would be interested in selling his shares. However, if he were looking for a quick way to unload them at a profit, greenmail—which stems from the fusion of the words blackmail and greenbacks—could be an enticing method.

Update, April 15, 2022: This article has been updated with information about Twitter’s poison pill strategy.