And it’s over before it even started.
Elon Musk, the richest man alive and avid fan of Twitter memes, has declined an offer join the board of the social network. Twitter Chief Executive Parag Agrawal’s announcement abruptly ended all hopes in the world of watching one of the platform’s biggest provocateurs join its management — but it also raised the prospect of a more outright takeover of Musk.
“We announced on Tuesday that Elon would be appointed to the board, pending a background check and formal acceptance,” Agrawal said called in a company briefing he shared. “Elon’s appointment to the board was scheduled to take place on 4/9. officially take effect, but Elon announced the same morning that he will no longer be joining the board.”
“Elon is our largest shareholder and we remain open to its contribution,” Agrawal added. A spokesman for Twitter declined to comment further on the situation. Musk has no media representative.
The deal to put Musk on the board came after him acquired a 9% stake in the company to become the largest single shareholder. Filing with the U.S. Securities and Exchange Commission showed that the seat was tied to an agreement by Musk to keep his stake below 15%.
It’s not clear what happened in the meantime to derail things. Internal employees can have bristly in the appointment of a business tycoon who previously used his platform to do so call people Pedophile, pump rand cryptocurrency projects, get into trouble with the SEC, raise doubts about COVID-19 vaccines and to mock Social Justice Activism. A recent series of tweets criticizing the company may also have questioned Musk’s willingness to subordinate his own impulses and grievances to the interests of the company and its shareholders.
The further way is just as unclear. Musk still seems to have his sizable stake in the company and hasn’t done well just yet past hints when launching his own competing social network. These are the scenarios that could develop from here:
Musk pays off
While there’s little sign he’s planning to do so, one option for Musk would be to sell his stake in Twitter outright and return to his old relationship with the company: as one of its biggest and loudest users, rather than as a co-owner.
That he got involved at all may have exacerbated his longstanding conflict with the SEC after he was late Submitting a required form disclosing the purchase of his share. Leaving now would save him another headache while also giving him more time to focus on his own businesses, including Tesla and SpaceX.
He would also make a profit if he could cash out quickly. Although the news of his not joining the board caused one short drop worth of Twitter stock they still are good above its price before its investment went public.
A updated SEC form that Musk filed Monday, reiterates that after declining Twitter’s offer to join the board, he may “from time to time purchase additional common shares” of the company, leaving the door open for him to exceed the 15% ownership cap to exceed that he would have faced as a board member.
If he went far enough in that direction, or worked with other activist shareholders, Musk could more directly impose his will through Twitter, forcing changes in leadership or policy to align the platform more with his vision as an uncompromising hands-free zone.
That’s an outcome financial analyst Dan Ives says could happen. “This is now transitioning from a Cinderella story, where Musk has joined the Twitter board and kept his stake below 14.9%, to a likely ‘Game of Thrones’ fight in the coming months,” Ives said , Managing Director of Equity Research at Wedbush Securities. tweeted.
Musk hangs around playing Gadfly
Even without a seat on the board and changes to his stake in the company, Musk will surely continue to have many, many opinions about what Twitter is and what it should be. By leveraging the considerable power he’s bestowed not only as a major shareholder, but also as one of the platform’s most popular users — he has more than 81 million followers whose opinions he regularly polls through in-app polls — Musk becomes a powerful one Stakeholders remain in the company.
Indeed, Musk’s new SEC filing outlines his freedom to “participate in discussions with the board and/or [Twitter’s] management team” and “to express their views to … the public through social media or other channels.”
Some of the changes he might be pushing for are ideological. In particular, Musk has signaled his frustration with how the company handles freedom of expression via its content moderation policies. “Given that Twitter serves as a de facto public marketplace, failure to uphold the principles of free speech fundamentally undermines democracy,” he said tweeted Last month. “What is to be done?”
Other ideas are more reminiscent of the emotional investment each superuser feels in the product they are obsessed with. Musk, for example, has called cryptocurrency spambots Twitter’s “single most annoying problem,” reigniting the long-running debate over whether the app should allow users to edit tweets after they’ve been posted (the company has said it does) . work on such a featurealbeit independent of Musk).
He has also said that the company should allow users of its premium subscription to be “Twitter Blue” verified – a mark of legitimacy connoted with a blue tick currently reserved for politicians, journalists and other public figures.
Musk could bet he’s better off driving these kinds of changes from outside the board than inside.
“He will have as much influence as a shareholder in these circumstances as he does as a director simply because of his significant public presence,” said Charles Elson, founding director of the Weinberg Center for Corporate Governance. “At this point it doesn’t matter if he’s under the tent as a director or outside the tent. He has significant… notoriety, publicity, and what he says about her will have an impact.”
Last week, a Twitter spokesperson told The Times that while the board “plays an important advisory and feedback role… day-to-day operations and decisions are made by Twitter’s management and staff.”
Matt Levine of Bloomberg, a longtime chronicler of Musk’s machinations, has also noted that if Musk had joined the board, he would have been obligated to act in the best interests of shareholders, rather than just pursuing his own whims.
Well, Levine wrote Monday: “If Musk wants to change the way Twitter works, he can meet up with Agrawal whenever he wants and ask for anything he wants. If Agrawal says no, he can threaten to buy more shares and take over the company.”