Twitter board of directors responds to Musk's takeover offer with a defensive plan

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Twitter board of directors responds to Musk's takeover offer with a defensive plan
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Twitter's board announced a plan that would make it harder for Elon Musk to buy the company.

Twitter's board of directors addressed Elon Musk's offer to buy Twitter by putting in place a plan that aims to hinder his ability to do so.on Friday a shareholder rights plan, more commonly known in the finance world as a “poison pill,” which is a defense strategy companies can use to protect themselves from hostile takeovers.

The plan will be in effect untilEssentially, this approach allows shareholders to purchase additional corporate stock at a discount, effectively diluting the value of the stock and making it more expensive for the prospective buyer,Twitter's rights plan can be exercised wherever any entity buys 15% or more of Twitter’s stock in a transaction not approved by the board, according to a statement released by the company.

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