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Elon Musk is joining Twitter’s board of directors.
Company announced the appointment Tuesday, a day after Mr Musk disclosed bought 9.2 percent shares An acquisition in the social media giant that has made it its largest shareholder. The news caused Twitter’s shares to skyrocket more than 20 percent on Monday.
Shares of Twitter opened up nearly 8 percent on Tuesday after news of Mr Musk’s appointment to the board of directors.
Mr. Musk will be appointed to a board seat expiring in 2024. As long as he serves on Twitter’s board and after 90 days if he chooses to resign, he will not be allowed to have more than 14.9. Percentage of Twitter shares.
“Through our conversations with Elon over the last few weeks, we have clearly seen that he will add great value to our board,” said Parag Agrawal, CEO of Twitter. tweeted on Tuesday.
The file detailing Mr. Musk’s investment on Twitter was from March 14, the day he crossed the 5 percent threshold that required legal disclosure. He could have amassed his stake long before then.
“I look forward to working with Parag & Twitter’s board of directors to make significant improvements to Twitter in the coming months,” said Mr Musk. tweeted in reply To Mr Agrawal.
Mr. Musk has been quiet about his intentions to buy a large stake, which was worth about $2.9 billion before being disclosed on Twitter but is now worth much more. It registered with the Securities and Exchange Commission with a document called 13G filingHe stated that he plans the investment to be passive and does not intend to take on a larger role in the company.
Aside from the deal limiting the size of his stake in the company, there were no “arrangements or agreements” between Mr Musk and Twitter that led to his role as director, Twitter announced on Tuesday.
“It’s theoretically possible to sit on a board in a passive monitoring capacity,” said Joshua Mitts, professor of corporate law at Columbia Law School. But the assumption is that someone will join a board of directors to make an impact on the company effectively, he said. “That doesn’t mean you can’t try to convince the SEC otherwise, but I think it’s going to be a tough fight,” said Mitts.
In recent weeks, Mr. Musk has criticized Twitter for failing to abide by its freedom of speech principles, arguing that users should be allowed to choose algorithms that pick their own tweets rather than what they see or create their own tweets. on Twitter to edit posts.
The idea was one that Twitter co-founder Jack Dorsey advocated while running the company. “Which algorithm will (or will not) be used should be publicly available,” he said. tweeted out in response to a tweet that Mr. Musk pushed for open source algorithms last month.
Mr. Dorsey took a step back He was due to take over as Twitter’s CEO in November and plans to leave the company’s board when his term ends next month. Mr Dorsey said on Tuesday “really happyIt’s about Mr Musk joining the board.
On Monday, in one of his first tweets after his take on Twitter was announced, Mr. Musk posted a Twitter poll asking users if they would like to be able to edit tweets, perhaps implying that he wanted to impress the features the company offers.
“Do you want an edit button?” Mr Musk asked on the site. Mr Agrawal responded to his tweet with a clear reference. Earlier poll by Mr. Musk on freedom of speech: “The results of this survey will be important,” Mr. Agrawal wrote monday. “Please vote carefully.”
As a director and major shareholder, it’s unclear to what extent Mr. Musk could influence policy decisions such as Twitter’s content moderation and its approach to misinformation. When representatives of activist fund Elliott Management and private equity firm Silver Lake joined the board in 2020, have agreed to refrain from expressing an opinion on the policy.
When asked if Mr Musk is expected to follow similar rules, a Twitter spokesperson said the day-to-day operations and decisions of the site would be by Twitter management and staff, although the board plays an important advisory role.
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