This should not have come as a surprise to anyone. Elon Musk, Tesla's Technoking will join the board of directors of Twitter after purchasing a 9.2 percent interest in the firm. Twitter's stock rose 2% on Tuesday as a result of the announcement.
CEO Parag Agrawal used the social media platform to welcome Musk, “Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board. 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.”
Elon Musk at the Giga Berlin Opening end of March 2022
Former chief Jack Dorsey applauded the move, saying Musk cares deeply about our world and Twitter’s role in it, and that he’s wanted the EV entrepreneur on board for a long time. According to a filing with the Securities and Exchange Commission, Musk's tenure will end in 2024. Musk cannot be the beneficial owner of more than 14.9 percent of the company's outstanding common shares for the duration of his board term or for 90 days afterwards.
Musk's purchase comes after a barrage of criticism directed at Twitter. Last month, the outspoken Tesla CEO conducted a Twitter poll to determine whether the company adheres to free speech ideals. Later, he stated that he was thinking about creating a new social networking site.
Musk indicated on Tuesday that he would push for product changes after being named to the board. While Musk's holding is the greatest among outside owners, it is classified as a passive interest, which indicates the holder isn't attempting to control or influence the company. Even still, some investors expected Musk to be more aggressive. Investors pushed the stock up 27% after the shareholding was announced on Monday, its highest day since the IPO.
“Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months!” Musk also tweeted. A few weeks ago Elon Musk criticized Twitter about their stance on free speech, so this is his opportunity to turn things around.
Musk proceeded to Twitter a few hours after his stake in the company was exposed to poll users on whether they wanted an edit button. Agrawal retweeted it but urge people to “vote carefully” as the consequences “will be important.”
Musk's investment comes at a critical juncture for Facebook. Agrawal, who succeeded Dorsey in November, has stated that he will concentrate on metrics and speed up Twitter's efforts to offer new products to customers. He's also under pressure to meet the company's ambitious internal targets, which include increasing Twitter's monetizable daily active users to 315 million by the end of 2023. For the most recent quarter, Twitter reported 217 million monetizable daily active users.
Musk's arrival at Twitter will usher in a slew of strategic initiatives, including a variety of near- and long-term opportunities for the company. With Musk on the Board, the next few months will be fascinating to watch.
Musk is a frequent Twitter user, with more than 80.5 million followers. He has, however, gotten himself into a lot of trouble because of his tweets. Musk tweeted in 2018 that he had "financing secured" to take Tesla private at $420 per share, sparking legal action. Tesla's legal counsel has since agreed to examine Musk's public pronouncements regarding the company's finances and other matters.
He was also subpoenaed by the SEC in November after he asked his Twitter followers if he should sell 10% of his Tesla stock, causing the shares to fall.
He asked in a Twitter poll, “Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock. Do you support this?” He allowed people to vote and said he would abide by the results of the poll, whichever way it went. About 3,519,252 people took part with 57.9% voting “Yes.” Shortly after this, Tesla shares went down nearly 5%
Since then, several current and former Tesla board members, including Robyn Denholm, Kimbal Musk, Ira Ehrenpreis, and Antonio Gracias, have sold hundreds of millions of dollars’ worth of Tesla stock on the Nasdaq stock exchange.