[imagesource: Illustration by Fortune / Original Photos by Getty Images]

Last week, news broke that Elon Musk was making a power play to buy Twitter.

Labelled a ‘hostile takeover’, Musk went public with his offer of $54,20 per share in cash, which valued the company at roughly $43 billion.

Yes, there’s a 420 reference in there.

Twitter has made it clear that it’s not all that keen to press ahead with the sale, announcing on Friday that it was implementing a shareholder rights plan.

This is also known as a “poison pill” manoeuvre and makes it both harder and more expensive for Musk to acquire the company without the social network board’s approval.

CNN reports:

The poison pill plan… will remain in place for nearly a year and will be triggered if Musk (or any other investor) expands his stake in the company to 15%; he currently owns around 9% of shares.

It would give all other shareholders the right to buy one additional share for each share they own at a discount. While other shareholders executing their rights to buy new stock under the plan would have to pay $210 for each new share they purchased, Musk (or another hostile investor) would have to pay $420.

Another 420 reference. Fighting fire with fire, I guess.

So, what happens next if Musk wants to press ahead? It’s been likened to a game of high stakes poker and if Musk’s interview at the recent TED conference is anything to go by he may have an ace up his sleeve.

He said he has a “Plan B” if his bid fails but didn’t elaborate further, leading to breathless speculation:

Some wondered whether his tweet on Saturday with the phrase “love me tender” was a hint that he’s considering circumventing Twitter’s board by offering to buy up shares en masse directly from other shareholders through a tender offer…

There’s a chance Musk is simply trolling, or looking to make a quick buck, as the rise in share price could net him north of $500 million should he sell his shares.

Alternatively, he could open negotiations with Twitter’s board (unlikely) or partner with a renowned private equity firm to lend weight to his offer.

Given the current standoff and lingering animosity, we may be heading down an uglier path:

Musk could sue Twitter’s board over the poison pill, accusing it of not acting in the best interests of shareholders, although that would likely become a drawn out fight…

Musk could also simply attempt to continue pressuring Twitter’s board from the outside to accept his deal, something he repeatedly did on Twitter over the weekend.

There has also been talk of a rival bid from another party, but that remains unsubstantiated.

Forbes has mapped out six scenarios, most of which we’ve covered above, but they finish by saying that Musk could ‘pull a Trump’:

He gets tired of toying with Twitter but is still determined to make his vision of free speech come to fruition…

He takes his immense amount of capital and creates his own social media platform, which would compete with others like Donald Trump’s Truth Social.

Truth Social has been, by every conceivable metric, a monumental failure.

Earlier this month, it was reported that daily downloads have declined nearly 95% since its February launch and both the chief of technology and chief of product development have stepped down.

Then again, Trump’s net worth pales when compared to Musk’s.

I expect there will be many punches and counterpunches thrown in the coming days and weeks.

[sources:cnn&forbes]