Elon Musk, the CEO of Tesla, has been appointed to the board of directors of Twitter, only one day after admitting that he has a 9.2 percent interest in the social media network. Twitter Inc. said in a regulatory filing on Tuesday that it had entered into an agreement with Musk on Monday that would provide the billionaire a seat on the company’s board of directors for a period that would expire at the company’s annual shareholders meeting in 2024.
On Tuesday morning, Twitter CEO Parag Agrawal remarked, “Through talks with Elon in recent weeks, it became evident to us that he would add enormous value to our Board.” After Elon Musk stated that he had purchased a stake in Twitter, the shares of the social media business surged 35%, bringing Musk’s net worth above $980 million for the first time. Tesla’s CEO is a regular user of Twitter, where he communicates with his 80 million followers, which may get him into trouble.
A spate of spontaneous tweets about taking Tesla private in 2018 prompted the Securities and Exchange Commission to appoint a Twitter babysitter for Musk, who is responsible for reviewing anything the CEO says about his firm on the social media platform. Musk is likely to exert pressure on Twitter on concerns of free expression, a subject on which he has already expressed strong opinions. Twitter is one of the numerous social media sites that are attempting to find a balance between freedom of speech and the censorship of information that is judged offensive, damaging, or inaccurate by the community at large.
Musk publicly discussed the possibility of creating his own social media network last month. “The failure to adhere to free speech rules on Twitter, which acts as a de facto public town square, has the potential to damage democracy on a basic level. What should be done in this situation? “he said.
At a time when Twitter founder Jack Dorsey has been advocating the concept of an open-source media platform with minimal constraints, his investment in the firm is particularly significant.
Analysts at Truist Securities said in a research note that Mr. Musk’s aim to alter the platform and make it more open-source, with fewer middleman restrictions, was a main motivator for the investment. In light of the fact that this is a very tiny investment for him (it represents less than one percent of his net worth), we would not be shocked to see him grow his position even more, and even take on a more active role in the company’s decision-making. Musk will be prohibited from owning more than 14.9 percent of Twitter’s outstanding shares, either individually or as a member of a group, for the duration of his tenure on the board and for the first 90 days after his departure. Twitter’s top shareholder, with a 9 percent stake, is now Mr. Zuckerberg. Musk expressed his excitement about bringing “major changes to Twitter in the next months” in a tweet.