‘Their Salary Will Be $0 if My Bid Succeeds’: Elon Musk Targets Twitter Board

Elon Musk – who started buying Twitter shares in January – now owns a 9.2 percent stake worth around $3.3 billion.

(Photo: Altered by The Quint)

Days after Twitter adopted a "poison pill" defence strategy to protect itself from a takeover bid, Tesla CEO Elon Musk on Monday, 18 April, took a swipe at the company's board of directors on Twitter.

"Board salary will be $0 if my bid succeeds, so that's ~$3M/year saved right there," Musk tweeted to a user's post criticising the board.

Last week, Musk had offered to buy out the company for $43 billion. Musk is the company's second-biggest shareholder, owning a 9.2 percent stake in the social media company.

During a TED conference on Thursday, 14 April, Musk, who has been critical of Twitter's policies, said that his proposed acquisition of Twitter is not about money but free speech and "the future of civilisation".

He had also asked his 80 million followers on Twitter if "taking Twitter private at $54.20 should be up to shareholders, not the board".

Twitter announced on Friday, 15 April, that it would permit its shareholders to buy discounted shares if an entity owns more than 15 percent of the stock in the company without taking the approval of its board of directors. Responding to that measure, Musk tweeted 'Love Me Tender', an Elvis Presley song.

Since he bought the stake in Twitter, Musk has tweeted several product ideas, such as eliminating ads to an edit button. He had also asked his followers if the company's headquarters should be turned into a homeless shelter.

More About the 'Poison Pill' Strategy

Twitter announced on Friday, 15 April, that its board of directors had unanimously adopted a "poison pill" defence strategy after it received an "unsolicited, non-binding proposal" from billionaire Tesla CEO Elon Musk to purchase the company.

In a statement, Twitter said that the poison pill defence or "The Rights Plan" was being adopted to enable all stakeholders to realise the full value of their investment in the company.

A poison pill defence is sometimes undertaken by a company in the event of a potential hostile takeover, which implies that a player on the outside stakes their claim on the company by urging major stakeholders to sell their shares without the approval of the company's board of directors.

The poison pill strategy is used to dissuade the outside player from taking over by making the deal less attractive and unduly expensive to them.

The strategy allows shareholders to buy additional shares at a discounted price. The more shares they purchase, the more watered down the ownership status of the hostile player becomes, i.e. the value of the shares owned by the entity reduces.

(With inputs from NDTV.)