When Tesla CEO Elon Musk revealed he had made a nearly $3 billion investment in Twitter on April 4, not many would have anticipated the soap opera that was about to begin.
In a matter of weeks, Musk went from deciding whether or not he would join Twitter’s board to launching a full-blown $43 billion hostile takeover bid to gain control of the company.
Twitter’s board members responded to the unwelcome offer on Friday by taking a so-called poison pill designed to prevent the billionaire entrepreneur from completing his takeover—or at least make the whole process less appetizing. The pill, known formally as a limited duration shareholder rights plan, will allow current Twitter shareholders to buy stock at a discounted rate if Musk’s bid is accepted.
It’s a move that didn’t sit well with Musk.
On Monday, in response to a tweet that argued the Twitter board’s interests aren’t aligned with its shareholders because of a lack of insider ownership, Musk said that if he is able to acquire the company, he will cut board members’ salaries to $0.
“Board salary will be $0 if my bid succeeds, so that’s ~$3M/year saved right there,” he wrote.
Musk’s tweet about board members’ salaries is yet another sign that his original bid to buy Twitter has transformed into a referendum on the company.
Musk has criticized the board’s low level of ownership in several recent tweets. “Objectively, their economic interests are simply not aligned with shareholders,” he wrote on Saturday.
And the Tesla CEO isn’t alone. Twitter cofounder Jack Dorsey has also been vocal about his growing distaste for his company’s board. On Saturday, the former CEO said the board has “consistently been the dysfunction of the company” in response to a thread from Garry Tan, cofounder of VC firm Initialized Capital, describing the “plots and coups” that went on during the early days of the company.
Dorsey also responded to a tweet that quoted venture capitalist Fred Destin’s critique of corporate boards: “Good boards don’t create good companies, but a bad board will kill a company every time.”
“Big facts,” the Block CEO wrote.
The board’s move to take a poison pill even led Musk to publicly question whether it should be involved in the process of deciding who can acquire the company at all.
Last Thursday Musk tweeted a poll that said: “Taking Twitter private at $54.20 should be up to shareholders, not the board?”
A whopping 83.5% of respondents said yes, illustrating the growing anti-board sentiment among Musk’s faithful following.
On Monday, the billionaire hinted at a possible tender offer to Twitter shareholders in response—a public request to buy stock directly from them. That could enable Musk to get around the board’s unwillingness to sell the company.
It’s just another move in the “game of high stakes poker between Musk and Twitter’s Board,” which could last up to 18 months, if history is any guide, Wedbush’s Dan Ives said in a note this weekend.
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