Twitter‘s CEO Parag Agrawal announced last week that billionaire Elon Musk would join the company’s Board of directors. Since then, Agrawal has stated that Musk does not want to be a member of the Board of directors but will continue to play an essential role in the company’s development. In a recent tweet, Agrawal stated, “Elon is our largest shareholder, and we will stay open to his feedback.”
“Elon Musk has declined to join our board of directors.” Here’s what I have to say about what occurred. The Board and I had several conversations regarding Elon joining the Board and personally with Elon. We were both enthusiastic about collaborating and aware of the dangers. We also believed that appointing Elon as a business fiduciary, in which he, like all board members, is obligated to act in the company’s and all of our shareholders’ best interests, was the best road ahead. In his most recent tweet, Agrawal stated, “The board offered him a seat.”
“Elon’s appointment to the Board was set to take effect on April 9, but later he announced that Elon Musk would no longer be joining the Board of Twitter that morning. This, I feel, is for the best. Whether or whether our stockholders are on our Board, we have always valued their opinion. Elon is our largest shareholder, and we will continue to listen to his advice,” Agrawal said. Musk was just named to the Board of directors.
Musk has proposed several modifications to the platform. One of these was the edit button, which the business promised would be available shortly. The functionality will be beta-tested for Twitter Blue members before being released to the whole public.
Musk has recommended several modifications for Twitter Blue users in tweets. In one of his tweets, he also stated that Twitter might be dying since top accounts with the most followers seldom post. On the other hand, Twitter’s CEO has signalled that the site would make adjustments that it deems necessary.
“There will be diversions ahead,” Agrawal added, “but our aims and priorities remain constant.” We are the ones who make the decisions and implement them, not anybody else.” Despite being the largest shareholder, this plainly illustrates that Twitter will not make adjustments simply because Musk recommended them.
Why is Elon Musk taking this decision for Twitter?
Mr Musk, the billionaire CEO of Tesla and SpaceX and the world’s richest person, purchased a 9.2 per cent interest in Twitter. In this social media network, he has over 80 million followers, according to a regulatory filing with the Securities and Exchange Commission. Mr Musk seems to be Twitter’s top shareholder, surpassing Vanguard’s 8.8 per cent position and dwarfing Twitter’s former CEO Jack Dorsey’s 2.3 per cent stake because he is the largest shareholder; Musk became a board member (which he denied) and had immunity to decide for the company.
According to the closing price of the company’s shares on Friday, Mr Musk’s Twitter stake, which he has been building up since last month, was worth around $2.89 billion. However, after news of his buy-in propelled Twitter’s stock up more than 27% by the end of Monday, it was worth $3.7 billion. The shares are a small part of Mr Musk’s stated net worth of $270 billion.
Mr Musk was unusually quiet about the purchase of the company’s shares, at least at first, despite his preference for posting everything on Twitter, from business ideas, insults, and jokes to, this past weekend, his experience at a famous Berlin nightclub.
Is Twitter going to be another Tesla?
Although Eberhard and Marc Tarpenning did build Tesla, many people still assume Musk did. Musk has a lot of money because of his Paypal, which he made after eBay Inc. Following the acquisition of that venture by EBAY, he invested $6.5 million in Tesla in 2004, becoming the company’s largest shareholder and chairman; he later received a belated co-founder name as a consequence of a lawsuit and took over as CEO to run the electric-vehicle company as he sees fit.
Musk prevented Musk from following in Musk’s footsteps when he disclosed on Monday that he had acquired 9.2 per cent of Twitter, making him the company’s largest stakeholder. Musk was nominated to the Board of directors of Twitter on Tuesday morning, with the condition that he possesses no more than 14.9 per cent of the firm.
According to The Wall Street Journal, Musk’s Twitter stake statement hinted it was a passive investment, but the filings were partial, late, and excluded true verification of inactive status. Musk’s intense passion for how Twitter should be run, his recent outcry about free speech, and his frustration that right-wing zealots have been banned are all becoming more apparent, as if his intense passion for how Twitter should be run, his recent outcry about free speech, and his frustration that right-wing zealots have been banned weren’t already clear.
Musk has shown his capacity to argue for change inside the company in the past. He recently asked his 80 million+ Twitter followers to see whether they wanted a tool to alter their tweets. Late in March, he questioned if Twitter adheres to the principles of free speech, causing right-wing users to demand that Musk reinstate the platform’s banned, Donald Trump. A resounding no was given to the free-speech problem, but a deep yes was given to an edit option.
Twitter’s new CEO, Parag Agrawal, and co-founder, Jack Dorsey, expressed their joy at Musk’s accession to the platform. According to Agrawal, the company has talked to Musk for many weeks, albeit the apparent calm is most likely a smokescreen.
The question now is what he will do with his newly acquired board post. Another question is whether Musk’s membership on the Twitter board will shield him from a separate SEC investigation into his Twitter activities. The SEC has already fined him and Tesla for tweets and demanded that he have someone with legal expertise oversee his tweeting, which he has refused. The SEC is unlikely to see this as a success, given that Musk filed his investment report a week later than required by law and deemed that position “passive” while negotiating for board membership.
From Twitter’s standpoint, though, this seems to be a win. The stock has surged almost 30% on the day after Musk’s ownership was disclosed; Twitter is getting a lot of free publicity from the Musk media machine, which must obsessively watch every move the world’s richest man makes. Musk has been surprisingly accommodating so far.
Edited by Prakriti Arora