Social media giant Twitter’s board has prepared for a hostile takeover a day after billionaire Elon Musk launched a $43 billion offer to purchase the platform. Twitter has implemented a “limited-duration shareholder rights plan”, otherwise known as a “poison pill”. This program will prevent anyone from acquiring more than a 15 percent share in the company. It accomplishes this by allowing others to purchase additional shares at a discounted price. The Twitter board of directors presented their defense strategy to the US Securities and Exchange Commission (SEC), claiming that it was necessary in light of Musk’s “unsolicited, non-binding proposal to acquire Twitter”. Former financial economist for SEC Josh White explained that a poison pill is “one of those last lines of defense against a hostile bid takeover”. He added: “We call it the nuclear option.” According to White, the board has stated, “that they don’t feel like it’s a high enough value for the company”.

A hostile takeover bid is when one firm tries to buy another against the wishes of that company’s management – in Twitter’s instance, the executive board. Musk said earlier this month that he owns a 9.2 percent share in the company, but he is no longer the largest stakeholder. Vanguard Group, an asset management firm, announced that its funds now own a 10.3 percent investment in the company. Musk has already stated that he believes Twitter restricts freedom of speech, and he restated this position at the Vancouver event. He has asserted that his major motivation is to expand free speech on Twitter, a constitutional right in the United States.