Elon Musk decided to take over Twitter. Twitter has 50 million stocks outstanding with a current price of $40 per share.

On 1/07/2022 Musk offered $48 per share conditioned on buying at least 50% of Twitter's outstanding shares.

A week later Musk bought 20% of the shares. The management of Twitter held an emergency meeting and decided to activate a poison pill. According to the poison pill conditions if one party holds more than 20% then additional stocks will be issued for all equity holders except that party (i.e., Musk) in a 1:2 ratio for a subscription price of $20. That is, for every two old shares an investor will be able to buy one new share.  

Requirements: (show all calculations)

- Can you determine whether it is an on-market or off-market bid? 

- If Musk ignores the poison pill and decides to buy an additional one per cent of Twitter shares 

1. How much money will he lose due to the activation of the poison pill?
2. Calculate the new price of Twitter shares
3. What will the effect of the activation of the poison pill be on Musk's voting rights?