After initially announcing he would accept a seat on the Board of Directors at Twitter, Elon Musk revealed on Monday that he has abandoned his original plan. Last week, the world’s richest man bought 9.2 percent of stock in Twitter, making him the largest shareholder. In order to sit on the board, Musk was capped at buying only a certain percentage of Twitter stock.
He had filed paperwork with the SEC stating he bought the stock as a “passive investor.” However, Musk filed more paperwork on Monday stating “he could now increase” his current stake in Twitter, “or push the company to pursue transactions.” Musk did admit that he has no plans to do so at this time.
On Sunday, Twitter CEO Parag Agrawal “warned Twitter employees” of possible “distractions ahead.” However, Twitter has not disclosed plans for a so-called “poison pill” which would force a dilution should Musk decide to buy stock over a certain amount.
Musk’s buying of even the small amount of stock last week has served to drive Twitter shares up by 2.6 percent on Monday. All total, Twitter stock has risen by twenty percent since he announced he’d bought the 9.2 percent last Monday.
Neither Musk nor Twitter has commented publicly regarding his change of heart.
Over the weekend, Musk had tweeted out multiple comments regarding Twitter. One of those tweets included a list of the ten most followed accounts that “rarely” offer any content. Along with Katy Perry and himself, President Barack Obama and Justin Bieber were among the most followed accounts that rarely post. However, other seemingly odd posts were later removed by Musk. These tweets included a proposal to drop the “w” in Twitter (i.e. – Titter) and to remove advertising on the social media platform. Again, no comment has been made regarding these now-deleted tweets.
Although Musk’s decision to remain the platform’s leading investor while deigning to serve on the board is “unconventional,” according to a former attorney for the SEC (the United States Securities and Exchange Commission), the move does not “appear to violate” any rules set forth by the agency.
However, the SEC itself has not commented on the situation.
To be sure, this move is quite typical of the unconventional Musk. Musk has courted a modicum of controversy for the bulk of his career. Interestingly enough, it typically pays off for him. Musk’s notoriety is his eccentricity. He himself was named on the “most followed, least content” list, but Musk has made some of his most controversial comments via Twitter. In addition, it’s apparent that Musk runs his own account rather than having an assistant post tweets on his behalf.
This gives Musk’s fans a feeling of being able to truly interact with the unconventional figure.
Plus, this isn’t the first time that Musk has publicly changed his mind on a business venture. In 2018, Elon Musk famously tweeted that he was going to take Tesla private, but never did. He paid $20 million in civil fines for the U-turn (Tesla as a company did the same).
However, Musk may have professional reasons for declining the board seat. According to the director of Weinberg Center for Corporate Governance, Tesla and SpaceX – Musk’s chief business ventures – keep the engineering and technology mogul quite busy. Tesla is focusing on manufacturing its electric truck, and SpaceX just launched the first private astronauts to dock at the International Space Station. Musk also sent a number of Starlink satellite kits to Ukraine so that the country would still have internet access. He’s also donated to feed the hungry.
If this is so, then Twitter itself might not need to spend time worrying that Musk is about to carry out a takeover. After all, Tesla and SpaceX are Musk’s bread and butter, his chief sources of income. However, one can never underestimate Musk. Musk could easily offer a “meaningful contribution” to Twitter as well as run his own companies. As someone who has taught the world to expect the unexpected, Musk could very well increase his Twitter stock – or simply sit on his 9.2 percent indefinitely.