Twitter (TWTR.us) is likely to reject Elon Musk's offer for the social media company. So on Friday, Twitter opted for a "poison pill" to protect itself from a takeover. This plan is, in effect, a rights offer where the "rights will become exercisable if an entity, person or group acquires beneficial ownership of 15% or more of Twitter's outstanding common stock in a transaction not approved by the Board" (www.cnbc.com). This implies that the cost of Musk's bid could rise significantly and that he will need to seek board approval first. The rights offer expires on 14 April 2023 but doesn't prevent the board from considering offers if they are in shareholders' interest.
However, the drama may have just started. Reports suggest that Apollo Global Management, the firm that owns Yahoo, has discussed financing a bid for Twitter. According to barrons.com, whilst not the buyer, Apollo has contacted various parties in this regard. Moreover, the website suggests that private equity firm Thoma Bravo LP and Morgan Stanley may also be in the race to acquire the social media company.
Please note that Twitter is expected to report on 28 April.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.