Twitter co-founder and outgoing board member Jack Dorsey blasted the social media platform’s board of directors on Saturday over its tactics in trying to prevent a takeover by Elon Musk.
Dorsey – who stepped down as CEO in November and is due to leave the board next month – engaged in a dialogue with Twitter users who were commenting on a tweet by venture capitalist Garry Tan, who posted on the same day: “The wrong partner on your board can literally make a billion dollars in value evaporate.”
The tweet was referring to last week’s enactment by the Twitter board of directors of the ‘poison pill’ strategy, a plan to stave off a potential takeover by Elon Musk, Tesla’s CEO and the world’s richest man, according to Forbes. Musk offered to buy the company earlier in April. Tan went on to suggest that the wrong partner causes “a surprising percentage” of start-up failures.
A poison pill is a tactic used by companies to fend off a hostile takeover by diluting the stake of the entity attempting the takeover.
“Good boards don’t create good companies, but a bad board will kill a company every time,” one user said.
“Big facts,” Dorsey replied.
“If [sic] look into the history of [the] Twitter board, it’s intriguing as I was a witness on its early beginnings, mired in plots and coups, and particularly amongst Twitter’s founding members. I wish if [sic] it could be made into a Hollywood thriller one day,” another person tweeted, to which Dorsey said, “It’s consistently been the dysfunction of the company.”
“Are you allowed to say this?” another user asked.
“No,” Dorsey replied.
Dorsey served as CEO during Twitter’s first 18 months, after the company was founded in 2006, but, according to Nick Bilton, a New York Times journalist and author of a book on the platform’s nascent years, was “kicked out because he had no idea how to run a company.” In his column in Vanity Fair in November, Bilton alleged that Dorsey was ousted as CEO this time as well.
Last week, the Twitter board “unanimously adopted” a limited duration shareholder rights plan (poison pill) “following an unsolicited, non-binding proposal to acquire Twitter,” a release said on Friday, a day after billionaire Elon Musk offered to buy the company for $43 billion.
It was revealed earlier this month that Musk already owns a more than 9% stake in Twitter. After this went public, Twitter CEO Parag Agrawal announced plans for Musk to join the board, but he declined the offer. If he had joined, he would not have been allowed to acquire more than 14.9% of beneficial ownership of the company’s outstanding common stock, CNBC says.
Twitter shares shot up by 15% after Musk’s stake in the social media platform was announced on April 4, but have since lost most of the gains after the company took a hostile stance to the potential takeover.
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