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 'merge' 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/share, and then 'merges' the company at $25/share, effectively forcing 49% of the shares to be sold at half price. Those shareholders get screwed because they didn'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 "If a hostile takeover starts, we'll create and sell new shares at a reduced price to existing shareholders- other than the attacker- to prevent the 51% scenario". This is done not to prevent any takeover, but in the interest of the 49% of holdouts who would have been screwed over. It's an effective block against the takeover.<p>The board represents ALL the shareholders, after all. They don'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's no poison pill.