Day: April 15, 2022

Twitter’s board of directors on Friday voted unanimously to use a tactic called a “poison pill” to fend off Elon Musk’s attempt to take over the company.

In such a defensive tactic, all Twitter shareholders except Musk could buy more shares at a discount. This would dilute the world’s richest person’s stake in the company and prevent him from recruiting a majority of shareholders supporting his move.

If Musk’s ownership in Twitter grows to 15% or more, the poison pill would go into effect.

Musk, who earlier this week was revealed as the company’s largest individual shareholder, with 9.2% of the shares, later offered more than $43 billion, or $54.20 a share, to purchase the entire company.

Musk’s offer would provide a substantial premium over Twitter’s current stock price of just more than $45 a share.

Free-speech concern expressed

When Musk made his offer, he lamented the company’s stance on free speech.

“I believe free speech is a societal imperative for a functioning democracy,” Musk said in the filing. “I now realize the company will neither thrive nor serve this societal imperative in its current form.”

But instead of putting Musk’s offer up for a vote with Twitter shareholders, the company’s board said Friday that it would instead offer its shareholders a chance to buy even more shares at a steep discount, effectively diluting the price of the stock.

The plan “will reduce the likelihood that any entity … gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium,” the company said.

The Twitter board’s plan will be effective for one year.

As rumors of a poison pill action circulated Thursday, Musk speculated via Twitter on what might happen.

“If the current Twitter board takes actions contrary to shareholder interests, they would be breaching their fiduciary duty,” he wrote. “The liability they would thereby assume would be titanic in scale.”

One analyst, Dan Ives of Wedbush Securities, told the New York Post that the board’s move was a “defensive measure,” adding that shareholders would not likely view it positively.

“We believe Musk and his team expected this poker move, which will be perceived as a sign of weakness, not strength, by the Street,” Ives told the Post.

Josh White, a former financial economist for the Securities and Exchange Commission, told BBC that Musk’s negotiation tactics might not be the “right approach” if Musk wants to acquire the company.

“I actually think if he was truly serious about the takeover attempt, he would have started at a price and left the window open for negotiation,” White said.

Twitter ‘storm’?

Edward Rock, who teaches corporate law and governance at New York University’s law school, also had doubts about whether Musk was serious about buying Twitter.

As Rock told NPR, Musk can show he is serious by revealing how he plans to finance the takeover, which he did not show in his SEC filing, or launch a proxy contest to replace Twitter board members in response to its poison pill.

If Musk fails to do so, Rock said, “he’s not going to acquire the company, and people can just write it off like some of his other Twitter storms.”

Source: Voice of America

The U.S. is again trudging into what could be another COVID-19 surge, with cases rising nationally and in most states after a two-month decline.

One big unknown?

“We don’t know how high that mountain’s going to grow,” said Dr. Stuart Campbell Ray, an infectious-disease expert at Johns Hopkins University.

No one expects a peak nearly as high as the last one, when the contagious omicron version of the coronavirus ripped through the population.

But experts warn that the coming wave — caused by a mutant called BA.2 that’s thought to be about 30% more contagious — will wash across the nation. They worry that hospitalizations, which are already ticking up in some parts of the Northeast, will rise in a growing number of states in the coming weeks. And the case wave will be bigger than it looks, they say, because reported numbers are vast undercounts as more people test at home without reporting their infections or skip testing altogether.

At the height of the previous omicron surge, reported daily cases reached into the hundreds of thousands. As of Thursday, the seven-day rolling average for daily new cases rose to 39,521, up from 30,724 two weeks earlier, according to data from Johns Hopkins collected by The Associated Press.

Dr. Eric Topol, head of Scripps Research Translational Institute, said the numbers will likely keep growing until the surge reaches about a quarter the height of the last “monstrous” one.

Higher level of immunity

Keeping the surge somewhat in check, experts said, is a higher level of immunity in the U.S. from vaccination or past infection compared with early winter.

Ray said the U.S. could wind up looking like Europe, where the BA.2 surge was large in some places that had comparable levels of immunity.

Both experts said BA.2 will move through the country gradually. The Northeast has been hit hardest so far — with more than 90% of new infections caused by BA.2 last week compared with 86% nationally. As of Thursday, the highest rates of new COVID cases per capita over the past 14 days were in Vermont, Rhode Island, Alaska, New York and Massachusetts. In Washington, D.C., which also ranks in the top 10 for rates of new cases, Howard University announced it was moving most undergraduate classes online for the rest of the semester because of “a significant increase in COVID-19 positivity” in the district and on campus.

Some states, such as Rhode Island and New Hampshire, saw the average of daily new cases rise by more than 100% in two weeks, according to Johns Hopkins data.

In New Hampshire, the increase in cases came two weeks after the closure of all 11 state-managed vaccination sites, and the governor is being pressured by some advocates to reverse course.

Focus on hospitalizations

Joseph Wendelken, spokesperson for the Rhode Island Department of Health, said the metric state officials are most focused on now is hospitalizations, which remain relatively low. About 55 COVID-19 patients are hospitalized, compared with more than 600 at one point in the pandemic.

Officials credit high vaccination rates. State statistics show 99% of Rhode Island adults are at least partially vaccinated and 48% have gotten the booster dose that scientists say is key in protecting against severe illness with omicron.

Vermont also has relatively high levels of vaccination and fewer patients in the hospital than during the height of the first omicron wave. But Dr. Mark Levine, the health commissioner there, said hospitalizations and the numbers of patients in intensive care units are both up slightly, although deaths have not risen.

Data from the Centers for Disease Control and Prevention show that new hospital admissions of patients with confirmed COVID-19 were up slightly in New England and the New York region.

On the West Coast, modelers from Oregon Health & Science University are projecting a slight increase in hospitalizations over the next two months in that state, where cases have also risen steeply.

As the wave moves across the country, experts said states with low rates of vaccination may face substantially more infections and severe cases that wind up in the hospital.

‘Watch the numbers’

Ray said government leaders must be careful to strike the right tone when talking to people about protecting themselves and others after COVID restrictions have largely been lifted.

“It’s going to be hard to institute restrictive, draconian measures,” Ray said. “Fortunately, we have some tools that we can use to mitigate risk. And so I hope that leaders will emphasize the importance for people to watch the numbers,” be aware of risks and consider taking precautions such as wearing masks and getting vaccinated and boosted if they’ve not done so already.

Lynne Richmond, 59, a breast cancer survivor who lives in Silver Spring, Maryland, said she plans to get her second booster and keep wearing her mask in public as cases rise in her state and nearby Washington.

“I never really stopped wearing my mask. … I’ve stayed ultra-vigilant,” she said. “I feel like I’ve come this far; I don’t want to get COVID.”

Vigilance is a good strategy, experts said, because the coronavirus is constantly throwing curveballs. One of the latest: even more contagious subvariants of BA.2 found in New York state, known as BA.2.12 and BA.2.12.1. And scientists warn that new and potentially dangerous variants could arise at any time.

“We shouldn’t be thinking the pandemic is over,” Topol said. “We should still keep our guard up.”

Source: Voice of America