Being on the board meant Musk could not “be the beneficial owner of more than 14.9% of the company’s common stock outstanding.” Does this mean he’ll buy more than the 9% he purchased last week?
Twitter CEO Parag Agrawal announced late Sunday night that Elon Musk declined an invitation to join Twitter’s board of directors.
Musk became Twitter’s largest shareholder last week when he purchased 73.5 million shares of the company.
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
Love how he mentioned the background check, making it seem like Musk failed it. It’s Elon Musk. I get why Twitter has to run a background check. I’m pretty sure everyone appointed to a board of directors has to go through a background check.
Musk’s appointment should have gone into effect on April 9. On that morning, he told Twitter he would not join the board.
Restrictions to shareholding could have influenced Musk’s decision. He “cannot be the beneficial owner of more than 14.9% of the company’s common stock outstanding” the entire time he is on the board “or 90 days after.”
Without being on the board, I guess Musk can own as much stock in Twitter as he wants?
In his original filing, Musk chose a 13G and not a 13D, which differentiates between a passive and active investor. Via the 13G designation, he’s confirming he’s not intending to shake things up as if we’re but he still has the stake.
But Musk amended his filing on Monday. He made it known that “he owns the stake for investment purposes and that he might acquire more shares or sell his current holdings in the company.”
The Wall Street Journal reported that Musk “might engage with the social-media company on a range of issues ‘without limitation.'” The amended filing states he “doesn’t have any plans or intentions to change his holdings in the company” but he has the right to change his mind “at any time.”
Those issues include Twitter’s “product and services, potential mergers and governance issues.”
Liberal Twitter employees exploded when news broke about Musk buying a 9% stake in the company. From Reuters:
Longer term, employees said Musk’s involvement may change Twitter’s corporate culture, which they say currently values inclusivity. Musk has faced widespread criticism for posting memes that mocked transgender people and efforts to stem the spread of COVID-19, and for comparing some world leaders to Hitler.
Several employees were alarmed by the warm welcome Musk received from Twitter CEO Parag Agrawal and cofounder Jack Dorsey, which prompted them to hit the job market this week.
“Some people are dusting off their resumes,” one person said. “I don’t want to work for somebody (like Musk).”
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