By Matt O’brien in Providence
PROVIDENCE, R.I. (AP) — Twitter said Friday that its board of directors has unanimously adopted a “poison pill” defense in response to Tesla CEO Elon Musk’s proposal to buy the company and take it private.
The move would allow existing Twitter shareholders — except for Musk — to buy additional shares at a discount, thereby diluting Musk’s stake in the company and making it harder for him to corral a majority of shareholder votes in favor of the acquisition.
Twitter’s plan would take effect if Musk’s roughly 9% stake grows to 15% or more.
The poison pill injects another twist into a melodrama surrounding the possibility of the world’s richest person taking over a social media platform he described Thursday as the world’s “de facto town square.”
Twitter said its plan would reduce the likelihood that any one person can gain control of the company without either paying shareholders a premium or giving the board more time to evaluate an offer. Such defenses, formally called shareholder rights plans, are used to prevent the takeover of a corporation by making any acquisition prohibitively expensive for the bidder.
Even if it discourages his takeover attempt, Musk could still take over the company by waging a “proxy fight” in which shareholders vote to retain or dismiss the company’s current directors. Twitter said the plan doesn’t prevent the board from negotiating or accepting an acquisition proposal if it’s in the company’s best interests.
“They’re gearing up for a battle here with Musk,” said Daniel Ives, an analyst for Wedbush Securities. “They also have to give themselves time to try to find another potential buyer.”
Musk has offered to buy the company outright for more than $43 billion, saying it “needs to be transformed as a private company” in order to build trust with its users and do better at serving what he calls the “societal imperative” of free speech.
“Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization,” he said during an onstage interview at a TED event Thursday, just hours after his bid was announced.
Musk revealed in recent regulatory filings that he’d been buying Twitter shares in almost daily batches starting Jan. 31, ending up with a stake of about 9%. Only Vanguard Group controls more Twitter shares. A lawsuit filed Tuesday in New York federal court alleged that Musk illegally delayed disclosing his stake in the social media company so he could buy more shares at lower prices.
After Musk announced his stake, Twitter quickly offered him a seat on its board on the condition that he would limit his purchases to no more than 14.9% of the company’s outstanding stock. But the company said five days later that Musk had declined.
Ives said Twitter’s poison pill path is a predictable defensive maneuver but could be seen as a “sign of weakness” on Wall Street.
Musk could try to fight the measure in court, but “no court has overturned a poison pill in the last 30 years,” said Columbia University law professor John Coffee. Rally shareholders to kick out the board might be more doable but also presents challenges to Musk, Coffee said.
Musk’s offer already faced resistance before Twitter threw its Friday counterpunch.
A Saudi prince who is among Twitter’s major shareholders scoffed at Musk’s offer in a Thursday tweet. Al Waleed bin Talal said he would reject Musk’s overtures because he didn’t believe $43 billion “comes close to the intrinsic value of Twitter, given its growth prospects.” The prince punctuated the tweet with another one from 2015 disclosing his Kingdom Company had raised its stake in Twitter to 5.2% — about half of what Musk now holds.
While Musk’s $54.20-per-share offer is nearly 40% greater than Twitter’s stock price before he disclosed his huge investment, it’s still far below the peak closing price of $77.63 reached less than 14 months ago. At that time, Twitter was valued at about $62 billion.
Musk responded to the prince with a tweet asking how many Twitter shares he holds and then making what may have been a veiled reference to the 2018 murder of journalist Jamal Khashoggi that was tied to Saudi Arabia’s Crown Prince Mohammed bin Salman. “What are the Kingdom’s views on journalistic freedom of speech?” Musk asked in a Thursday tweet.
In a sign that investors are skeptical about Musk’s offer, Twitter’s stock fell in the first day of trading after the takeover bid was announced Thursday — exactly the opposite of what an approving market reaction looks like. The stock markets were closed Friday for the Good Friday holiday. Twitter said it plans to disclose more details of its shareholder plan in an upcoming regulatory filing.
Another outspoken billionaire, Dallas Mavericks owner and tech investor Mark Cuban, also weighed in on Twitter to share his theory that Musk is making his bid to goose the company’s stock price so he can sell his stake at a profit. Using a profane term, Cuban also postulated Musk is using the bid to torment the U.S. Securities and Exchange Commission, the stock market regulatory agency that fined Musk $20 million in 2018 after he tweeted about a potential buyout of Tesla that never materialized.
In Thursday’s TED event, Musk made it clear he is still incensed with the SEC and cursed the regulators with a profanity.
AP Technology Writer Michael Liedtke in San Ramon, California contributed to this report.
Red Deer Brewery to hold Beer Tasting on the Ross Street Patio
Sawback Beer Tasting on the Ross Street Patio
The Ross Street Patio is celebrating its 10th summer and Sawback Brewing Co. is releasing a new Raspberry Ale named after the Downtown’s most loved feature – The Ross Street Patio!
On Friday, May 27th, the Downtown Business Association and Sawback Brewing will host a free tasting from 5-8PM, complete with live music from Paeton Cameron and James Adams and a light snack from Chubby’s Jerk BBQ & Kitchen! Visitors can then grab a seat on one of the adjacent restaurant patios for a full-sized Ross Street Patio Beer and enjoy the show. This event is free and open to the public.
Amanda Gould, Executive Director of the DBA says, “This is such an exciting time for the Ross Street Patio and Downtown. We have so much planned over the summer and the next natural step is to license the entire patio through council deeming it an Entertainment District. We will find out in the beginning of June if council approve the bylaw and, straight after that, you can start enjoying full-sized beverages right on the patio while enjoying the summer entertainment!”
The Ross Street Patio is the hub of downtown entertainment, and the DBA is proud to be programming it for the summer season – summer activities include art installations, live music and family fun activities. “Follow us on Facebook to keep updated on what’s going on and when. If you are a community group or an event organizer wishing to bring some activity to Ross Street Patio, please direct message or call the DBA to find out about the support, including financial support, that we can provide to help your event or activity come to life.”
The Downtown Business Association has been operating in Red Deer for over 30 years, serving approximately five-hundred business owners in the Downtown area. Through partnerships and leadership in advocacy and promotion, the DBA is the catalyst for a vibrant and prosperous downtown that is the place to live, work, play and do business.
Downtown Red Deer: safe, fun and open for business!
By Mark Weber
With summer just around the corner, downtown Red Deer is all the more bustling with fun events and even more local businesses to check out. But there are a few misconceptions about the area that persist, and that can even prevent some folks from visiting the city’s increasingly vibrant core. “Downtown Red Deer has an always lot of good things going for it,” explained Amanda Gould, executive director of the Downtown Business Association. “Sometimes, that is outweighed by the perception people have of downtown. “What we need to remember is all that has been happening downtown, what with the murals, the events, the alley upgrades – there are a lot of good things happening. And it’s making it such a great destination to come and visit and to also set up your business,” she added.
“We have seen, over the last year, an increase of 50 new businesses downtown. It’s great news, and the downtown is a great place to go.” As mentioned, however, certain misconceptions about the downtown area persist including that
there is a significant parking problem. “We absolutely do not have a parking issue,” noted Gould. Visitors may not always be able to park directly in front of their destinations, particularly if they are in a facility with lots of other businesses and agencies, but there are typically plenty of places to park nearby if you are prepared for a short jaunt. “If you were to travel just a half a block down the street, or even a block down, you will find there are usually plenty of spaces. We are lucky that our downtown is walkable as well.”
She also mentioned that some residents believe that downtown Red Deer is unsafe. “Again, this is a misperception – it’s not the reality of it,” she said. “We are so lucky as a neighbourhood downtown to have our own RCMP policing unit everyday – they chat with business owners and help them solve any safety issues they may come into contact with,” she said. “There is a team of seven on that unit, and surely that makes downtown one of the safest places to be.”
As to the surge in businesses, Gould noted that reasonable rents attract local entrepreneurs to launch ventures there as well – nicely adding to the growing variety of businesses in the area. It’s yet another plus for Red Deer residents.
In the meantime, one of downtown’s most prominent features – the Ross Street Patio – is really starting to liven up these days with the warmer weather and regularly scheduled musical performances. ‘Music on the Ross Street Patio’ is a free event and is open to all ages. Performances run from 4:30 –7:30 p.m. on show nights. Another annual favourite, the Downtown Market, kicks off on Wednesday, May 25. An accredited farmers’ market, visitors are invited to come down and purchase all their fresh fruits and veggies between 3:30 and 6:30 p.m. each Wednesday. Live music on the Ross Street Patio is also a key feature on Wednesdays.
Gould added that Friday, May 27, is the official kick-off to summer on the Ross Street Patio. To celebrate, they have partnered with Sawback Brewing to introduce a limited-edition Ross Street Patio beer which is super exciting, she explained. “Free samples will be available at 5 p.m. that day (May 27). There will also be music and other activities. The special beer, featured at several downtown restaurants, will be available through the summer.
Looking into June, performances on the Patio will run on Wednesdays, Thursdays and Fridays. “Businesses are now opening up their patios – and we’ve got the music happening on the Patio, so we are really starting to see a lot more people coming down, spending some time outside and enjoying the live music that we are putting on,” she said.
For more about the Downtown Business Association and all that is planned for the Ross Street Patio, find them on Facebook or visit www.downtownreddeer.com.
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