Twitter is a publicly-traded company, and as such is always for sale — in theory, at least. Elon Musk just made an offer to purchase all the shares of the company at a premium. Musk has been highly creative with his public relations around the offer, framing himself as someone who could restore free speech to the platform. He has a novel idea to save the company money right out of the gate.
The board was not pleased by this idea since they all want to keep their salaries and Musk buying the company means all of them will be looking for other companies that will censor speech at will. To counter the attempted takeover, they are instituting a ‘poison pill strategy that dilutes the shares to the point it will be almost impossible to purchase Twitter outright.
Rejecting a premium offer to buy the company is at odds with the fiduciary duty of the board to maximize profits for the shareholders. This fact is not lost on Florida Governor Ron DeSantis. What does this stock dispute have to do with Florida? Well, Florida’s pension fund has Twitter stock, which makes them a shareholder. Shareholders can sue for breach of fiduciary duty. DeSantis is looking at suing Twitter for its rejection of Musk’s offer because there is a direct loss to Florida shareholders.
It is important to note that the Twitter board owns almost no Twitter stock. Their interests are not in alignment with the shareholders. It is an ideological board rather than a board interested in making money. The psychic benefit of controlling the narrative and stifling speech outweighs whatever money that would be made from the deal. The problem with that thinking is that although that works on social media, it does not work in real-world securities litigation.
Musk has gamed this out no matter what happens. If he can buy Twitter, he gets an established user base and he can reintroduce free speech to the platform. If the board frustrates the sale, they will do irreparable harm to the company. They will hemorrhage users and the stock will tank. Musk can then buy a competitor or start his own company and outcompete them. There is a hunger in the United States for a return to the days when people could say what they think. Those days may be back sooner than we think.