APRIL 11 (Reuters) – Elon Musk rejected Twitter’s ad (TWTR.N) He offered to join its board of directors, a dramatic turnaround in a week in which the billionaire became its largest shareholder, with the social media company warning of “future distractions”.
Twitter CEO Parag Agrawal said in a memo posted on the site on Sunday that the company’s board of directors had several discussions with Musk, but did not reveal why Tesla had it. (TSLA.O) President’s decision.
Twitter shares were down about 2% to $45.31 in pre-market trading on Monday. It rose 27% on April 4, when Musk announced his stake to go public, but has since given up 7.5% of those gains.
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Agrawal said the planned appointment was set to become effective on Saturday, effectively preventing the world’s richest person from becoming a beneficial owner of more than 14.9% of Twitter’s common stock.
“I think this is the best,” Agrawal said in the note. “There will be distractions in the future, but our goals and priorities remain unchanged.” (https://bit.ly/3usFqhe)
The announcement was so surprising that the company’s website still featured Musk as a member of Twitter’s board of directors.
Musk, whose net worth is estimated at $274 billion by Forbes, only responded with an emoji on Twitter. Tesla did not immediately respond to an email requesting comment from its CEO.
Musk, who calls himself an absolute freedom of expression and criticizes Twitter, disclosed his 9.1% stake on April 4, and said he plans to make major improvements to the social media platform. Read more
The disclosure of the stake sparked widespread speculation about his intentions, from taking full control of the platform to taking an active role in the company’s decisions.
CFRA Research Analyst Angelo Zino wrote in a client note that Musk’s latest decision opens the way for him to take a bigger position and possibly make an overall pitch.
“We thought the stock cap and board seat were originally intended to tie Musk’s hands in many ways, and we think it’s unlikely it will be the kind of individuals who will now sell his stake and walk away,” Zino added.
Company sources told Reuters that news of Musk taking a seat on the board of directors has caused some Twitter employees to panic about the future of the social media company’s ability to edit content. Read more
Before taking a stake, Musk conducted a Twitter poll asking users if they thought Twitter adheres to the principle of free speech.
A day after becoming the largest contributor, he launched another survey asking users if they wanted an edit button, a long-awaited feature that Twitter is working on. Read more
The Tesla boss also asked users in a poll whether Twitter headquarters should be converted into a homeless shelter, a plan backed by Amazon.com Inc’s (AMZN.O) Founder Jeff Bezos. Read more
On Saturday, Musk proposed changes to Twitter Blue’s premium subscription service, including lowering its price, banning ads, and giving the option to pay in cryptocurrency dogecoin. Read more
“It is clear that Musk wants to retain complete freedom to criticize the company’s policy, to steer it in the direction of needed travel,” Susanna Streeter, an analyst at Hargreaves Lansdown, said in a note.
“He still has a seat in the ring, remains the largest contributor, and also has the power of 81 million Twitter followers to do just that.”
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Additional reporting by Abinaya Vijayaraghavan, Nivedita Balu and Gopi Babu in Bengaluru; Editing by Arun Koyyur, Miyoung Kim, Edmund Klamann and Anil D’Silva
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