May 17, 2022

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Tesla CEO Elon Musk Won't Join Twitter's Board of Directors

Tesla CEO Elon Musk Won’t Join Twitter’s Board of Directors

Twitter CEO Parag Agrawal tweeted the news on Sunday night.

“Elon’s appointment to the Board was officially effective 4/9, but Elon shared the same morning that he would not be joining the Board anymore,” Agrawal said. He said in a tweet. “I think this is the best. We have and will always appreciate input from our shareholders whether they are board members or not. Elon is our largest shareholder and we will remain open to his input.”

A Twitter spokesperson confirmed that Musk has decided not to join Twitter’s board of directors and noted Agrawal’s statement.

The development comes less than a week after the Tesla and SpaceX founder revealed that he had bought more than 9% of the company’s shares, and Twitter (TWTR) said in regulatory deposit who – which planned to set Musk will serve on its board of directors for a term ending in 2024. Both Musk and the Twitter leadership are pleased to have him on the board.

Musk tweeted on Tuesday that he “looks forward to working with the Parag & Twitter Board to make significant improvements to Twitter in the coming months!” Jack Dorsey, founder of Twitter, said Musk and Agrawal would make a “fantastic team”. Twitter’s stock jumped after its initial purchase was revealed.

As part of his agreement to join the Board of Directors, Musk has committed to not acquiring more than 14.9% of the company’s shares during his tenure. Some corporate governance experts have suggested that the move may be a way to curb Musk’s influence on the company. Now, that restriction is no longer in effect, leaving the door open for Musk to take a more aggressive stance by buying more Twitter shares.

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In his Sunday night tweet announcing Musk’s reversal, Agrawal said the company’s board of directors “believed that having Elon as an agent for the company where he, like all board members, must act in the interests of the company and all of our shareholders, is the best way forward.”

Usually, company board members privately share their suggestions for the company, which could mean that Musk would have had to stop tweeting his thoughts on Twitter. The announcement that Musk would not join the board of directors came after he posted a series of tweets about the company over the weekend, including one in which he suggested removing the letter “w” from “Twitter” — a seemingly crude joke that has since been deleted. – And else In it he asked if Twitter was “dying” because some of his most followed accounts don’t tweet very often.

“In our opinion, the board of Twitter and Musk have not been able to reach agreement on Musk’s communications with the public (various polls) via Twitter as it is likely that he would have needed to take a more calm stance as part of joining the board,” Wedbush analyst Dan said. Ives in an investor note on Monday. He added that Musk’s relationship with Twitter could now become a “game of thrones” between Musk and Twitter with a high probability that Elon would take a more hostile stance toward Twitter and build his active stake in the company.

It’s not entirely clear what changes Musk was – or may still be – looking for on Twitter. In recent weeks, Musk suggested on Twitter that the platform does not allow enough freedom of speech, and said that it should make its algorithm open source. He also polled his followers last week on whether they “want an edit button,” an old, if divisive, feature request from many Twitter users. (Twitter said last week that it was working on an edit feature last year.)

Musk has not tweeted about his decision. CNN Business has reached Tesla (TSLA) to comment.