Tesla kajillionaire Elon Musk is now Twitter's largest shareholder, and to keep him from using his billions in pocket change to buy the company out completely, the company is putting Musk on its board of directors.
Twitter is appointing Tesla CEO Elon Musk to its board of directors, according to a filing with the US Securities and Exchange Commission. Musk will serve as a class II director until 2024. This is a type of position that can be used as an anti-takeover measure.
In a pair of tweets, Twitter CEO Parag Agrawal confirmed Musk’s new role on the board. He called Musk “both a passionate believer and intense critic of the service” and said he would “bring great value to our Board.” Musk responded via Twitter saying he looks forward “to making significant improvements to Twitter in coming months!”
The Company will appoint Mr. Musk to the Company’s Board of Directors (the “Board”) to serve as a Class II director with a term expiring at the Company’s 2024 Annual Meeting of Stockholders,” the filing says. “For so long as Mr. Musk is serving on the Board and for 90 days thereafter, Mr. Musk will not, either alone or as a member of a group, become the beneficial owner of more than 14.9% of the Company’s common stock outstanding at such time, including for these purposes economic exposure through derivative securities, swaps, or hedging transactions.”
On Monday, Musk announced via an SEC filing that he’d purchased a 9.2 percent stake in Twitter, despite his complaints about free speech on the platform. Musk’s acquisition makes him the largest individual shareholder in the company. Shortly after making that disclosure, Musk polled followers about creating an “edit” button. Agrawal replied by tweeting “the consequences of this poll will be important,” and he warned users to “vote carefully.”
Jack Dorsey, the former CEO of Twitter, expressed that he’s “happy” that Musk is joining the Twitter board, citing that “he cares deeply about our world and Twitter’s role in it.” Dorsey stepped down as CEO in November 2021 but will still remain on the board until sometime in May.
As noted by CNBC, Musk’s investment could set off more issues with the SEC. The SEC requires anyone with more than a 5 percent stake in the company to disclose their purchase within 10 days. Musk first acquired the shares on March 14th, 2022, and didn’t reveal that information until April 4th, 2022 — 21 days after the fact. According to CNBC, the SEC’s fines for this kind of violation typically aren’t exorbitant (for the world’s richest man at least), and tend to waver around the $100,000 mark.
Needless to say, Elon Musk now effectively owns Twitter without actually having to buy it, and you can bet that his friend Donald Trump will be back online very soon. Next time a major Republican politician -- or Musk himself -- goes into a racist, bigoted, and/or antisemitic tirade, don't even expect the consequences of a soft ban.
Musk has tens of billions to play with, and now has de facto control of a major weapon as a result. If you think Twitter's bad now, give it a few months.
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