Elon Musk is joining Twitter’s board of directors, in a deal coming after the CEO of Tesla and SpaceX acquired a 9.2% stake in the social-media network to become its largest single shareholder.
Under the agreement, Musk is prohibited from amassing more than 14.9% of Twitter’s stock as long as he remains a director on the board — forestalling the possibility for at least the next two years that the mega-billionaire, who currently has a net worth of more than $300 billion, will mount an effort to take over the company.
In a tweet, Twitter CEO Parag Agrawal wrote, “I’m excited to share that we’re appointing @elonmusk to our board! Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board.” Agrawal continued, “He’s both a passionate believer and intense critic of the service which is exactly what we need on @Twitter, and in the boardroom, to make us stronger in the long-term. Welcome Elon!”
Musk replied to Agrawal’s tweet with this: “Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months!”
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Musk has publicly shared a few thoughts about Twitter.
Two weeks ago, the celebrity tech executive suggested in a Twitter poll that the service, which “serves as the de facto public town square” is “failing to adhere to free speech principles” — and that this “fundamentally undermines democracy.” Essentially, he asked his Twitter followers if they agreed.
On Monday evening, after the disclosure of Musk’s 9.2% stake in Twitter, he again queried his 80 million followers, this time about whether they want the ability to edit Twitter messages after they’ve been posted — a feature long desired by many Twitter users. Of the nearly 3 million votes as of this writing, 73.5% were cast in favor of the idea (which Musk playfully labeled as “yse”).
Do you want an edit button?
— Elon Musk (@elonmusk) April 5, 2022
Agrawal, Twitter’s former CTO who took the reins after Jack Dorsey resigned last fall, quote-tweeted Musk’s poll about the edit button — highlighting Musk’s new influence at the company. “The consequences of this poll will be important. Please vote carefully,” Agrawal wrote.
In an 8-K filing Tuesday, Twitter said it will appoint Musk to the company’s board with a term expiring at the company’s 2024 annual meeting of stockholders.
“For so long as Mr. Musk is serving on the Board and for 90 days thereafter, Mr. Musk will not, either alone or as a member of a group, become the beneficial owner of more than 14.9% of the Company’s common stock outstanding at such time, including for these purposes economic exposure through derivative securities, swaps, or hedging transactions,” Twitter said in the filing.
Twitter shares, after jumping 27% Monday on news of Musk’s massive stake, were up more than 9% in premarket trading Tuesday. The stock closed up 2% on the day, to $50.98/share.
“Now it’s time to get out the popcorn and watch the developments over the coming months with Musk on the board,” Wedbush Securities analyst Dan Ives wrote in a note to clients. “The Street will clearly like this news as Musk’s positive influence will be embraced by investors as seen by the stock’s reaction yesterday. We continue to believe Musk being more involved at Twitter further expands his massive ecosystem and reach, however balancing his key roles at SpaceX and Tesla should NOT be an issue or major worry for investors at this pivotal time.”