DeSantis to Hold Twitter Board Accountable for 'Breaching Fiduciary Duty' by Rejecting Musk Takeover Bid

DeSantis to Hold Twitter Board Accountable for 'Breaching Fiduciary Duty' by Rejecting Musk Takeover Bid
Florida Gov. Ron DeSantis at a press conference at the Miami Dade College’s North Campus in Miami on Jan. 26, 2022. (Joe Raedle/Getty Images)
Tom Ozimek

Florida Gov. Ron DeSantis waded into Elon Musk's Twitter buyout saga on Tuesday, saying that Florida would look into holding Twitter's board of directors accountable for breaching their fiduciary duties after its members adopted a "poison pill" tactic to thwart Musk's takeover attempt.

DeSantis made the remarks at a press conference in The Villages, Florida, in the context of a discussion on a higher education reform bill that he signed into law on Tuesday.
"We're going to make sure that our institutions of higher education are committed to excellence, not ideology," DeSantis said, with measures introduced by the bill (SB 7044) including a requirement for lists of instructional materials to be posted at least 45 days before the first day of class and be searchable and downloadable, for instance, by parents wishing to monitor the content of classroom materials their children are exposed to.

DeSantis then segued into commenting on Musk’s recent offer to buy all outstanding Twitter common stock at a premium of around 20 percent above market value, a deal estimated to be worth around $43 billion.

"What Musk is trying to do is basically liberate it from being an agent of censorship into making it an actual open platform like it's advertised," the Florida governor said.

Twitter’s board initially responded to Musk’s buyout offer by saying it would “carefully review” the proposal and take action that it believes is in the best interest of the company and its shareholders.
The board later announced it was adopting a limited duration shareholder rights plan, a tactic known as a “poison pill,” that would make it financially more painful for the potential acquirer, effectively signaling its opposition to Musk’s bid.

DeSantis said that Twitter's rejection of Musk's apparently financially lucrative offer was not based on business considerations but politics.

 Elon Musk attends the opening ceremony of the new Tesla Gigafactory for electric cars in Gruenheide, Germany, on March 22, 2022. (Patrick Pleul/Pool via Reuters)
Elon Musk attends the opening ceremony of the new Tesla Gigafactory for electric cars in Gruenheide, Germany, on March 22, 2022. (Patrick Pleul/Pool via Reuters)

'They Can't Control Elon Musk'

Some analysts said that the Twitter board's rejection of an offer to buy the company at a significant market premium was against the best interest of shareholders.
It's a sentiment Musk echoed when he said that if Twitter’s board actions are not aligned with the interests of shareholders, the board would be breaching its fiduciary duty and so would assume legal liability that would be “titanic in scale.”

DeSantis expressed a similar idea at Tuesday's presser, saying that he doesn't think the Twitter board's rejection was "based on financial concerns or business judgment."

"They rejected it because they know they can't control Elon Musk, they know that he will not accept the narrative, and that their little play toy of Twitter would not be used to enforce orthodoxy and to basically prop up the regime and these failed legacy media outlets," DeSantis said.

"That's why they did it. It was not, in my judgment, because it wasn't a good business deal."

DeSantis said that the state of Florida and its pension system holds some Twitter shares and that the fund probably suffered injury.

"So we're going to be looking at ways that the state of Florida potentially can be holding these Twitter board of directors accountable for breaching their fiduciary duties," DeSantis said.

The Epoch Times has reached out to Twitter with a request for comment on DeSantis' remarks, but did not receive a reply by publication.

'Inclusive Arena for Free Speech'

Musk has said that his buyout bid was intended to transform Twitter in a bastion of free speech by making its algorithm open source and its moderation policies more transparent.
He argued that Twitter has become a “de facto town square” where important conversations should be able to take place with as few constraints as possible.

“In my view, Twitter should match the laws of the country,” Musk told the audience at a TED event in Vancouver, Canada, acknowledging legal caps on free speech like direct incitement to violence.

“But going beyond that and having it be unclear who’s making what changes to where, having tweets mysteriously be promoted and demoted with no insight into what’s going on, having a black box algorithm promote some things and not other things, I think this can be quite dangerous,” Musk said.

“My strong, intuitive sense is that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization,” he added.

Musk's effort to take Twitter private and transform it into an "inclusive arena for free speech" has been hailed by free speech advocates but opposed by some who fear that fewer restrictions on Twitter will make it easier to abuse the platform's massive reach by, for example, amplifying the spread of disinformation.

Twitter has over 200 million daily active users.

One vocal opponent to Musk's Twitter acquisition effort is The Washington Post's editorial board, which penned an op-ed titled “Let’s hope Elon Musk doesn’t win his bid for Twitter.”

The Post's editorial board argued that Musk’s vision regarding free speech is more or less the same one that was held by former CEO Jack Dorsey, particularly in the early days of the platform.

Over time, however, Twitter gravitated towards stricter rules because they “learned some lessons after observing how their products can be abused to manipulate elections, or spread health misinformation, or harass people en masse,” the Post's board wrote.

While acknowledging that Twitter moderators “sometimes make mistakes, and more transparency surrounding enforcement decisions is in order," the board argued that a "broader backtracking would be an error” and that Musk's effort “to protect speech at all costs and keep Twitter free of bots and spam" is nearly impossible.

Tom Ozimek is a senior reporter for The Epoch Times. He has a broad background in journalism, deposit insurance, marketing and communications, and adult education.
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