Elon Musk joins Twitter’s board of directors.
company Appointment announced On Tuesday, a day after Mr. Musk revealed his presence Bought 9.2 percent of the stock In the social media giant, a purchase appears to make him its largest shareholder. That news sent Twitter shares up more than 20 percent on Monday.
Twitter’s stock opened up about 8 percent on Tuesday after news of Mr. Musk’s appointment to the board.
Mr. Musk is scheduled to be appointed to a board seat that expires in 2024. As long as he serves on Twitter’s board, and for 90 days after he chooses to step down, he will not be allowed to own more than 14.9 percent of Twitter’s shares.
“Through conversations with Elon in recent weeks, it has become clear to us that he will bring great value to our board of directors,” said Twitter CEO Parag Agrawal, Tweet on Tuesday.
The filing detailing Mr. Musk’s investment in Twitter was dated March 14, the day he crossed the 5 percent threshold that requires regulatory disclosure. He could have built up his stake long before that.
“I look forward to working with the Parag & Twitter board to make significant improvements to Twitter in the coming months,” Mr. Musk tweeted in reply To Mr. Agrawal.
Mr. Musk has been quiet about his intentions to buy a large stake in Twitter, which was worth about $2.9 billion before its revelations but is now worth much more than that. He registered with the Securities and Exchange Commission through a document called a 13G Depositindicating that he planned the investment to be passive and that he did not intend to play a greater role in the company.
Twitter’s announcement on Tuesday said that other than agreeing to limit the size of his stake in the company, there were no “arrangements or understandings” between Mr Musk and Twitter that led to his role as director.
“It is theoretically possible to ‘join on a board’ with passive monitoring ability,” said Joshua Mets, professor of corporate law at Columbia Law School. But, he said, the assumption is that someone will join a board of directors to exert effective influence on the company. “That’s not to say you can’t try to convince the SEC otherwise, but I think it will be an uphill battle,” Mr. Mets said.
Mr Musk has criticized Twitter in recent weeks for failing, in his view, to adhere to the principles of free speech, and has argued that users should be allowed to choose algorithms that choose or adopt the tweets they see, rather than relying on Twitter to take care of posts.
The idea was one that Jack Dorsey, the co-founder of Twitter, championed while he was leading the company. “The choice of which algorithm to use (or not to use) should be open to everyone,” he said chirp Last month, in response to a tweet from Mr. Musk pushing for open source algorithms.
Mr. Dorsey step down as CEO of Twitter in November and plans to leave the company’s board of directors when his term expires next month. Mr Dorsey said Tuesday that “really happyAbout Mr. Musk’s joining the Board of Directors.
On Monday, in one of his first tweets after revealing his Twitter stake, Mr. Musk posted a Twitter poll asking users if they wanted to be able to edit tweets, possibly in a sign that he wanted to influence the features the company offers.
“Do you want an edit button?” asked Mr. Musk on the site. Mr. Agrawal responded to his tweet with a clear reference to Previous poll conducted by Mr. Musk On freedom of expression: “The results of this survey will be significant,” Mr. Agrawal Monday books. “Please vote carefully.”
As a principal and principal contributor, it is not clear to what extent Mr. Musk will be able to influence policy decisions, such as Twitter’s approach to moderating content and misinformation. When representatives from fund activist Elliott Management and private equity firm Silver Lake joined the board in 2020, they They agreed to refrain from expressing opinions on politics.
When asked if Mr. Musk is expected to abide by similar rules, a Twitter spokesperson said that while the board plays an important advisory role, the site’s day-to-day operations and decisions will be made by Twitter’s management and staff.
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