Reports are emerging about Tesla CEO Elon Musk’s decision to not join Twitter’s board has given him an unrestricted path forward in owning a majority share of the company.
Musk shocked the business, tech and political worlds when he became a 9% shareholder of Twitter. This amount of stock ownership made Musk the largest shareholder of Twitter.
Musk had signed an agreement with Twitter, stating, as long as he served on the board of Twitter “…Mr. Musk will not, either alone or as a member of a group, become the beneficial owner of more than 14.9% of Company’s common stock outstanding at such time, including for these purposes economic exposure through derivative securities, swaps or hedging transactions.”
Following this agreement, Elon declined to join the board.
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
This sudden change prompted speculation that Elon’s decision of not to join the board gives him the ability to own a majority share of the controversial social media giant.
Given this news…@elonmusk is no longer bound to this restriction on ownership. https://t.co/gNFoPhiOer pic.twitter.com/R8Nx3p38hK
— Yashar Ali ? (@yashar) April 11, 2022
In a statement, Twitter CEO Parag Agrawal said, “The Board and I had many discussions about Elon joining the board, and with Elon directly. 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. The board offered him a seat.”
Agrawal went on to say, “We announced on Tuesday that Elon would be appointed to the Board contingent on a background check and formal acceptance. Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same morning that he will no longer be joining the board. I believe this is for the best. We have and will always value input from our shareholders whether they are on our Board or not. Elon is our biggest shareholder and we will remain open to his input.”
The statement concluded with Agrawal saying, “There will be distractions ahead, but our goals and priorities remain unchanged. The decisions we make and how we execute is in our hands, no one else’s. Let’s tune out the noise, and stay focused on the work and what we’re building.”
