The defensive move is meant to prevent a “hostile acquisition” as the company considers Elon Musk’s $43 billion offer to buy the company.

Twitter’s board has unanimously adopted a temporary shareholder rights plan. Under the new rule, if any person or group acquires 15% or more of Twitter’s stock without board approval, other shareholders will be given the opportunity to buy discounted shares.


“The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders,” Twitter said in a press release. 

The limited duration plan will expire in one year. The plan does not mean that the company can not or will not accept Musk’s offer, but is seen as a defensive precaution while it’s being discussed.

Analysts say the move will not be viewed positively by shareholders and is likely to be challenged in court. “We believe Musk and his team expected this poker move which will be perceived as a sign of weakness not strength by the Street,” WedBush Securities analyst Dan Ives wrote.

A spokesperson for Twitter said there would be no further comments.

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