A poison pill is a maneuver that typically makes a company less palatable to a potential acquirer by making it more expensive for the acquirer to buy shares of the target company above a certain threshold.
“The whole point of it is to make the offer from the board more attractive than the acquirer,” said Carliss Chatman, an associate professor of law at Washington and Lee University.
The strategy also gives a company more time to evaluate an offer and can give the board leverage in trying to force a direct negotiation with the potential acquirer.
"The Rights Plan is intended to enable all shareholders to realize the full value of their investment in Twitter. 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."
Stifel analyst Mark Kelley has downgraded Twitter stock from "hold" to "sell" as the social media giant faces a "full blown Elon circus."
