Elon and friends etc etc…..
As billionaire Elon Musk continues his pursuit of buying out Twitter’s shareholders and taking the company private, both Musk and Twitter’s board of directors are taking time to make weed jokes.
Musk started the back-and-forth with his initial offer to shareholders: He’s willing to pay $43 billion for the company, or $54.20 per share.
This is no mathematical happenstance, but an intentional wink by Musk, intended to reference the cannabis culture term “420,” which goes back decades.
April 20 is an unofficial holiday for cannabis smokers, and 4:20 pm is considered a shared time to light up. The term “420” by itself is synonymous with cannabis use, and making inane 420 references has become a kind of juvenile meme online.
Twitter’s board of directors announced intentions late last week to rebuff Musk’s offer with a so-called “poison pill” defense, which is formally known as a shareholder “rights agreement.” The tactic is used to avoid hostile takeovers by creating more shares in the market, thus diluting an acquirer’s overall stake.
On Monday, Twitter filed an 8-K with the US Securities and Exchange Commission which detailed how the rights agreement tactic works.
“In general terms, it works by imposing a significant penalty upon any person or group that acquires 15% or more of the shares of Common Stock without the approval of the Board,” the filing said. As of last week, Musk owned just shy of 10% of Twitter’s available stock.
If he acquires more than 15% of Twitter’s stock, then the rights agreement entitles shareholders (except for Musk) to pay $210 per share for stock that has a “then-current market value of twice the Exercise Price.” And what’s $210 doubled?
Twitter stock as of Monday, April 18 — two days shy of April 20 — is trading at just under $47 per share.