Ask HN: What happened to Twitter poison pill?
During a hostile takeover, someone buys 51% of the shares. They then elect a board of people who will approve whatever they want.<p>Then they can do things like &#x27;merge&#x27; the company with some other company they own at a board-approved value-per-share. That value will be much lower than what they paid per share when buying it on the open market, but not so low that the government gets involved. Eg: Musk buys the shares at $50&#x2F;share, and then &#x27;merges&#x27; the company at $25&#x2F;share, effectively forcing 49% of the shares to be sold at half price. Those shareholders get screwed because they didn&#x27;t sell their shares during the initial takeover.<p>Edit: Or, just run the company however they want and share the profits with the other 49%, but ignore their votes, etc.<p>The Poison Pill says &quot;If a hostile takeover starts, we&#x27;ll create and sell new shares at a reduced price to existing shareholders- other than the attacker- to prevent the 51% scenario&quot;. This is done not to prevent any takeover, but in the interest of the 49% of holdouts who would have been screwed over. It&#x27;s an effective block against the takeover.<p>The board represents ALL the shareholders, after all. They don&#x27;t want to see anyone get screwed.<p>But now Musk has made a deal that the board has approved. All shareholders get a specific price that is approved. The board wants this to happen, so there&#x27;s no poison pill.