How Musk fought off 'poison pills' and lawsuits to close in on Twitter

Tesla tycoon versus the tech titan: How swashbuckling billionaire Elon Musk fought off ‘poison pills’, lawsuits and a hostile board of directors to narrow in on a $43bn Twitter takeover

  • The Tesla boss started hoarding shares in the social media firm back in January
  • He quickly rocketed to top of its shareholders’ list, acquiring nine per cent stake
  • But then he hit choppy waters, accepting a place on the board then rejecting it
  • There were also lawsuits as well as rival companies circling to try to buy Twitter
  • Musk brazenly blasted through all the obstacles and appears to be set to buy it

It has been one of the most dramatic takeover attempts in history, seeing a swashbuckling billionaire pitted against one of the largest tech giants in the world.

But Elon Musk’s seizing of Twitter has been a months-long pursuit that has seen him send shockwaves through the world of business.

The Tesla magnate started hoarding shares in the social media firm at the start of the year in an apparent bid to preserve free speech online.

He quickly rocketed to the top of its shareholders’ list, acquiring a huge nine per cent stake in the tech giant.

But then he hit choppy waters, accepting a place on the board then rejecting it, getting embroiled in lawsuits and seeing rival companies circle to buy Twitter.

Meanwhile bosses at the social media firm appeared to do all they could to ensure he could not not seize it – even launching a ‘poison pill’ strategy to sink his chances.

Yet Musk brazenly blasted through all the obstacles, punting a $43billion offer earlier this month and showing how he would finance it.

As the entrepreneur looks set to pull off one of the all-time greatest takeovers, DailyMail.com looks at the rollercoaster journey he has been on to grasp his prize.

The Tesla magnate started hoarding shares in the social media firm at the start of the year in an apparent bid to preserve free speech online

January 31: Musk hoards Twitter shares and buys them ‘almost daily’

Musk started buying Twitter stock on January 31 and continued to buy shares during every trading session through April 1, according to an SEC filing.

Just days earlier, he told his 80 million followers on the site he was ‘ giving serious thought ‘ to creating his own social media platform.

A user asked him: ‘Would you consider building a new social media platform, @elonmusk?

‘One that would consist an open source algorithm, one where free speech and adhering to free speech is given top priority, one where propaganda is very minimal. I think that kind of a platform is needed.’

The Tesla and SpaceX CEO replied through his official account: ‘Am giving serious thought to this.’

The billionaire businessman, 50, appeared to be suggesting he was sick of Twitter over the right to freedom of speech.

April 4: Musk says he bought 9.2 percent stake in firm a month earlier

Musk revealed he had purchased a 9.2 percent stake in the social media giant on March 14.

He tweeted ‘oh hi lol’ after the news sent shockwaves through the business world and across social media. He added: ‘Do you want an edit button?’

April 5: He joins Twitter’s board of directors – sees share price rocket

Twitter said the tech tycoon was joining the company’s board of directors, causing the social media platform’s shares to rise over 7 per cent in premarket trading.

It led to speculation he would try to address what he called the platform’s ‘failure to adhere to free speech principles’ and ‘fundamentally undermine democracy’.

Under the terms of the agreement, Musk would have served on the board until the company’s 2024 annual shareholders meeting.

As long as he remains a director, the agreement said, he could not won more than 14.9 percent of the company’s stock.

It meant he would not have been able to take over the company until well after his term on the board was over.

The firm said: ‘Twitter is committed to impartiality in the development and enforcement of its policies and rules.

‘Our policy decisions are not determined by the Board or shareholders, and we have no plans to reverse any policy decisions.’

‘As always our Board plays an important advisory and feedback role across the entirety of our service.

‘Our day to day operations and decisions are made by Twitter management and employees.’ 

 

 

April 8: Asset managers take over Musk as largest shareholders

Asset manager Vanguard Group increased its stake to overtake Musk as the largest shareholder.

Vanguard owned 10.3 percent of Twitter, while the Tesla tycoon owned 9.1 per cent, making him the largest individual shareholder.

Vanguard, led by CEO Tim Buckley, increased its stake in the company at some point during the first quarter, according to SEC filings made on April 8.

It previously reported owning 67.2million shares of Twitter or about 8.4 per cent of the company as of the end of December, according to FactSet.

Other owners of large quantities of Twitter stock included Morgan Stanley, Fidelity and Black Rock.

Vanguard, led by CEO Tim Buckley, increased its stake in the company at some point during the first quarter, according to SEC filings made on April 8

April 9: Musk rejects the offer to join Twitter’s board of directors

Musk rejected an offer to join Twitter’s board after disclosing his stake in the company.

Analysts said the move signaled his intention to take over the company as a board seat would have limited his stake to just under 15 per cent.

Parag Agrawal said the board would still ‘remain open’ to Musk’s input, but warned: ‘There will be distractions ahead but our goals and priorities remain unchanged.’

He said: ‘The board and I had many discussions about Elon joining the board, and with Elon directly. We were excited to collaborate and clear about the risks.

‘We also believed that having Elon as a fiduciary of the company where he, like all board members, has to act in the best interests of the company and all our shareholders, was the best path forward. The board offered him a seat.’

Agrawal continued: ‘We announced on Tuesday that Elon would be appointed to the board contingent on a background check and formal acceptance.

‘Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same morning that he will no longer be joining the board.’

Parag Agrawal said the board would still ‘remain open’ to Musk’s input, but warned: ‘There will be distractions ahead but our goals and priorities remain unchanged’

April 12: Twitter shareholder Marc Bain Rasella files suit against Musk

Marc Bain Rasella filed a lawsuit against Musk for alleged securities fraud at a Manhattan federal court, according to a Bloomberg report.

The suit claimed the billionaire was required to disclose his holdings to the SEC by March 24, but the delay kept Twitter’s share price down allowing Musk to buy more.

Musk was accused of violating a regulatory deadline to reveal he had accumulated a stake of at least five per cent.

Instead, according to the complaint, Musk did not disclose his position in Twitter until he had almost doubled his stake to more than nine per cent.

That strategy, the lawsuit alleges, hurt less wealthy investors who sold shares in the company in the nearly two weeks before Musk acknowledged holding a major stake.

April 14: The Tesla tycoon offers to buy Twitter for $43 BILLION

Musk offered to buy Twitter for $43billion, a regulatory filing showed, as he moved to seize the social media giant.

Musk’s offer price of $54.20 per share represented a 38 per cent premium to the closing price of Twitter’s stock on April 1.

This was the last trading day before the Tesla CEO’s over nine per cent investment in the company was publicly announced.

It even appeared to reference marijuana – also known as 420 – a common reference used by Musk on Twitter.

Twitter said in a regulatory filing Musk provided a letter containing a proposal to buy the remaining shares of Twitter he did not already own.

April 15: Twitter launches ‘poison pill’ strategy to stop Musk buyout

Twitter’s board announced a dramatic poison pill plan to prevent Musk from increasing his stake in the company.

Also known as a shareholder rights provision, the plan would trigger a dilution of shares if any shareholder builds up a 15 per cent stake without the board’s approval.

The plan did not prevent Twitter from accepting Musk’s offer or entering negotiations with him or other potential buyers.

But it did stop the billionaire from putting pressure on the board by buying up ever more shares on the open market.

Musk hit back with a laughing emoji to a version of the classic ‘Distracted Boyfriend’ meme mocking Twitter’s board.

The imaged depicted ‘Twitter’s board’ looking wistfully at the option to ‘keep that easy gig that gives me shares’ as ‘Twitter investors’ look on with disgust.

Twitter’s board is led by chairman Bret Taylor, who is also the co-CEO of business software giant Salesforce

April 16: Musk tweets Love Me Tender in tease of hostile takeover

Musk tweeted ‘Love Me Tender’ as he again teased at the possibility of a hostile takeover of Twitter.

The billionaire posted the Elvis Presley lyrics in a potential bid to lure shareholders with a tender offer that could see him seize control.

A tender offer would see him bypass the board and go to shareholders with his offer of $54.20 a share – but he would need to show how he would finance his bid.

He also appeared to suggest he would strip board members of their salaries, saying they would get ‘$0 if my bid succeeds’.

April 18: Jack Dorsey slams the Twitter board for ‘plots and coups’

Jack Dorsey slammed the board of Twitter as he weighed into the toxic fight over Elon Musk’s attempted hostile takeover for the first time.

The former CEO, who is still a member of the board himself, blasted the ‘plots and coups’ that were ‘consistently the dysfunction of the company’.

In a series of bombshell tweets and replies, he endorsed one posting saying that ‘a bad board will kill a company every time’.

Replying to one post, he said: ‘When I was fired in 2008 and made chair, the board took most of my shares away from me.

‘I also gave 1 per cent of the company back to the employee pool in 2015. So, ended up with very little of company.’

He also replied to one comment mentioning ‘plots and coups’ in the Twitter board saying: ‘it’s consistently been the dysfunction of the company’.

Earlier in the thread, he replied to a post quoting a ‘Silicon Valley proverb’ by venture capitalist Fred Destin.

It said: ‘Good boards don’t create good companies, but a bad board will kill a company every time.’ Dorsey said: ‘Big facts.’

Former CEO Dorsey slammed Twitter’s board of directors on as he replied to a series of unfriendly tweets

April 21: SpaceX boss unveils his $46.5billion financing package

Elon Musk unveiled his $46.5billion financing package to fund his takeover of Twitter – using Tesla as collateral.

The world’s richest man filed documents with the Securities and Exchange Commission outlining how he would seize the social media giant.

He committed $21billion in equity, $13billion from Morgan Stanley in debt facilities and another $12.5billion from the bank and others in margin loans.

But ‘a portion’ of his shares in Tesla have been put forward as collateral, which analysts feared could have a huge impact on the firm.

The 50-year-old billionaire also revealed he was weighing up launching a tender offer for Twitter after the company ignored his acquisition offer.

He said he was exploring getting stocks directly from shareholders but admitted he ‘has not determined whether to do so at this time’.

Musk filed the document with the SEC showing how he planned to take over Twitter for about $46.5billion.

He secured a debt commitment letter from Morgan Stanley Senior Funding to the tune of $13billion in financing.

This was made up of a loan of $6.5billion, a senior secured revolving facility for $500million, a bridge loan of up to $3billion and an unsecured bridge loan for up to $3billion.

He also got a margin loan commitment letter from Morgan Stanley for $12.5 billion in margin loans. And Musk also got $21billion through equity financing.

But he has used ‘a portion’ of his shares in Tesla as collateral in the high-stakes move, which analysts warned could have huge ramifications for the company.

 

April 22: Musk posts ‘boner’ killer picture of Bill Gates on Twitter

Musk dissed Bill Gates’ gut on Twitter, posting a photo of the Microsoft mogul next to Apple’s controversial pregnant man emoji ‘in case you need to lose a boner.’

He posted a follow-up image in response to the Friday post of six hooded figured captioned ‘shadow ban council reviewing Tweet’.

The joke could further infuriate woke Twitter staffers angered by Musk’s ongoing bid to buy the firm after saying he would support free speech.

That is because the pregnant man emoji is aimed at being inclusive to transgender people – with Musk frequently taking aim at what he sees as woke overreach.

 

April 25: Musk ‘closes in on seizing Twitter’ as talks in ‘final stages’

Musk was closing in on seizing Twitter as talks between the Tesla magnate and the tech giant entered their final stages, reports say.

The billionaire could take over the company as soon as this morning as the board reportedly looked set to accept his offer of $54.20 per share.

The tycoon’s representatives were said to be hammering out terms including a timeline and fees if an agreement was signed and then fell apart.

The two sides were reportedly working into the early morning to finalize the ‘fluid and fast-moving’ negotiations.

Twitter shares soared by four per cent as the markets opened to $50.84 a share amid reports it would be seized by Musk. 

Twitter stocks rocketed four per cent as the market opened in New York on Monday morning

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