Elon Musk recently took a step back from the decision to join Twitter’s board of directors. Musk commented in several tweets being part of the board would lead to important changes in favor of freedom of expression.
Musk was supposed to have a voice on the board, on April 9, with his 9.1% stake in Twitter. But it is possible, that they may have limited his stake, arguing that the billionaire’s shares should have been 14.9%, according to Reuters.
Parag Agrawal said Twitter offered Musk a seat on its board because the company believed it was “the best way forward.” Board members had to “act in the best interests of the company and all of our shareholders,” the BBC reported.
“I believe this is the best thing to do,” Agrawal said. There will be distractions down the road, but our goals and priorities remain unchanged.”
Agrawal shared a tweet announcing that the Tesla owner will not be part of the Twitter board’s decisions.
Musk’s drastic change raises many doubts, as the entrepreneur himself had asked Twitter for a seat on the board.
The billionaire limited himself to responding only with a hand-over-the-mouth emoticon tweet on Twitter, which he later deleted.
– Elon Musk (@elonmusk) April 11, 2022
Senior equity analyst at Center for Financial Research and Analysis Angelo Zino said we had thought the equity cap and board seat were originally intended to handcuff Musk in many respects. But, we believe he is unlikely an individual who would now sell his stake and walk away.
Musk announced last week that he would make significant changes to the social network as a majority shareholder. The entrepreneur urged in his tweets for greater freedom of speech. In another tweet, he asked users if they wanted the “w” deleted from the social network’s name. He wrote about allowing Twitter Blue subscribers to pay with Dogecoin (cryptocurrency derived from Bitcoin) to get “authentication” verification and Twitter Blue to be ad-free. He further suggested that Twitter should turn its San Francisco headquarters into a homeless shelter, and opined on possible bots inflating numbers, even asking users if the social network is in agony, according to CNBC.
Twitter shares turned positive Monday morning after CEO Parag Agrawal revealed that Elon Musk had abandoned his plan to join the company’s board. Twitter shares rose 4% on Tuesday following the board’s announcement.
However, on April 4, after Musk’s involvement was initially disclosed, Twitter had a breakneck rise of more than 27%. Something that had not happened since 2013.
Agrawal said, “We have and will always value input from our shareholders whether they are on our board or not,” he added. “Elon is our biggest shareholder and we will remain open to his input,” BBC reported.
Laura Foll, portfolio manager at Janus Henderson Investors, said: “The statement from the Twitter chief executive is, I think, quite telling in that he says ‘look, Elon decided not to join the board.'” The statement said the board offered him a seat [and] it was Elon Musk’s decision.
“But the Twitter chief executive goes on to say ‘there will be distractions ahead but our goals and priorities remain unchanged. Let’s tune out the noise.’ I think this is the Twitter chief executive saying ‘we want to get on with running the business without these distractions,'” Foll continued.
She told BBC Radio 4’s Today program, “This is a very large publicly listed company. There are very strict rules around what board members, what executive members can say publicly.”
As a major shareholder, Elon Musk has more than four times the stake of Twitter co-founder Jack Dorsey, who holds 2.25% shares in the company.
So far, Musk remains the largest shareholder in Twitter but without a seat on the board.