Musk has officially declined to join Twitter’s board of directors
After days of speculation, it has finally been confirmed that Elon Musk will not be joining the Board of Directors at Twitter, despite his large percentage part ownership of the company. The news came after Twitter's current CEO, Parag Agrawal publicly announced it on the 10th of April in a tweet.
Musk still remains the largest single shareholder of Twitter with a 9 percent stake in the company and the board will continue to value his input, it has also been confirmed. Musk also confirmed his intention not to join the board in another tweet on Saturday the 9th of April.
Musk officially disclosed his purchase of the shares on the 5th of April via SEC filings. This is a legal requirement whenever an individual or company purchases over 5 percent of any publicly traded company in the United States.
This is the same day that Musk was originally scheduled to officially join the board "contingent on a background check and formal acceptance,” according to Agrawal.
“We were excited to collaborate and clear about the risks. We also believed that having Elon as a fiduciary of the company where he, like all board members, has to act in the best interests of the company and all our shareholders was the best path forward,” Agrawal also wrote.
To date, there is no real clear reason why Musk decided not to take his seat on the board. To help steady the ship somewhat, Agrawal told the current Twitter staff that “there will be distractions ahead but our goals and priorities remain unchanged.”
Elon has decided not to join our board. I sent a brief note to the company, sharing with you all here. pic.twitter.com/lfrXACavvk— Parag Agrawal (@paraga) April 11, 2022
Twitter stock jumped when Musk bought in
In response to Musk obtaining a large stake in the company saw other investors follow suit. After months of decline in stock prices, Twitter's stock suddenly jumped 27 percent on the 4th and 5th of April.
In the officially filing, it was also confirmed that if Musk joined the board he would be limited to owning no more than a 14.9 percent stake in the company. This includes the company’s common stock outstanding, including derivative securities, swaps, or hedging transactions.
It is not clear if this has dissuaded Musk from joining the board or not as he is now, theoretically at least, able to increase his stake in excess of this ceiling now.
Prior to his official announcement to decline his appointment to the board, Musk had spent some brainstorming ideas for improving the platform. This included a comical poll about whether Twitter should drop the "w" from its name.
Other series suggestions included potentially letting Twitter Blue subscribers pay in Dogecoin. He also suggested that members get an “authentication” checkmark, and keep Twitter Blue free of advertisements.
“Everyone who signs up for Twitter Blue (ie pays $3/month) should get an authentication checkmark,” Musk wrote. “And no ads. The power of corporations to dictate policy is greatly enhanced if Twitter depends on advertising money to survive.”
He also suggested that Twitter could convert its headquarters office in San Francisco into a homeless shelter, “since no one shows up anyway.”
This suggestion caught the attention of Jeff Bezos who supported the idea. Bezos wrote that Amazon's similar scheme “worked out great and makes it easy for employees who want to volunteer."