EXPLAINER: What Twitter’s ‘poison pill’ is supposed to do
By MICHAEL LIEDTKE
AP Technology Writer
Twitter is trying to thwart billionaire Elon Musk’s takeover attempt with a “poison pill” — a financial device that companies have been wielding against unwelcome suitors for decades. Ingredients of each poison pill vary, but they are all designed to give corporate boards an option to flood the market with so much newly created stock that a takeover becomes prohibitively expensive. Although they’re supposed to help prevent unsolicited takeovers, poison pills also often open the door to further negotiations that force a bidder to sweeten the deal. Adopting a poison pill also often draws lawsuits.
