(PatriotWise.com)- It was reported last week that Elon Musk is not Twitter’s largest shareholder. According to an amended 13G filing from late March, that honor belongs to Vanguard.
Vanguard’s 13G filing, dated March 31, revealed that it owns 82.4 million shares of Twitter stock or a 10.29 percent stake in the company. That is a 17 percent increase in shares from the last time Vanguard reported its stake in early February.
Immediately it was presumed that Vanguard’s increased purchases were done in response to Elon Musk’s attempt to acquire Twitter. However, since it comes from a filing in March, Vanguard must have purchased those shares sometime in March. In other words, before Musk made his move.
Securities regulatory provisions require any investor who owns more than 10 percent of a company to file a 13G form within ten days to report the holdings. So Vanguard made this purchase before Elon Musk submitted his offer to buy Twitter. It wasn’t a countermove.
That isn’t to say that Twitter’s board of directors isn’t trying to find a way to monkey-wrench Elon Musk’s takeover bid.
It was reported on Friday that the board adopted a limited-term shareholder rights plan (AKA a “poison pill”) making it harder for Musk to acquire the company.
This “poison pill” gives shareholders the right to acquire more shares in Twitter at a steeply reduced price, thereby diluting Musk’s stake in the company. The provision will be triggered if an investor attempts to purchase more than 15 percent of the company’s shares.
The move may not stop Musk entirely, but it could make it more expensive for him to buy Twitter. It could also force Musk to negotiate with Twitter’s board of directors.
In its statement announcing the move, the board claimed their “rights plan” will reduce the chance of an entity or person gaining control of the company “through open market accumulation without paying all shareholders an appropriate control premium. The provision is also intended to provide the Twitter board “sufficient time” to make an informed decision and “take actions that are in the best interests of shareholders.”