Twitter’s Poison Pill Is a Joke

Who knew Twitter’s board was made up of a bunch of standup comedians? That’s the only conclusion that can be drawn from the company’s statement today announcing the poison pill it adopted to fend off Elon Musk. Hilariously, Twitter suggests that the oxymoronically named “shareholder rights plan” is “intended to enable all shareholders to realize the full value of their investment in Twitter.” Let’s just be clear: If there is one thing the poison pill will absolutely not do, it is ensuring that shareholders realize the full value of their Twitter shares.

In fact, it will do the opposite. If the poison pill helps Twitter drive Musk away, Twitter’s stock price will drop back to where it was before Musk appeared, between $30 and $40. Let’s see—that’s roughly where Twitter shares were trading about three years ago, in April 2019. By contrast, Alphabet shares have nearly doubled since then, a reminder of just what an underperformer Twitter stock has been. The only way, then, for Twitter shareholders to realize the “full value” of their shares is for the board to sell the company to the highest bidder. That means an auction.