Elon Musk and Twitter have always had a tumultuous relationship. With Musk now owning a 9.2% investment in Twitter and with a seat on the board of directors, that’s unlikely to change. The stake is worth more than $3 billion, according to a regulatory filing released last week. For comparison, Twitter co-founder and former CEO Jack Dorsey owns slightly over 2% of the company, and Dorsey, who stepped down as CEO in November 2021, is stepping down from the board of directors when his tenure expires in May.
Musk’s board term will run through 2024, according to a separate regulatory filing from Twitter, thereby making him a more prominent presence within the company than Dorsey in the future. “Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months!” Musk sent out in a tweet on Tuesday.
Musk accused the site of failing to adhere to free speech values in a March 26 tweet, and claimed that he was “seriously considering” creating his own social media network. According to a regulatory filing with the Securities and Exchange Commission, Musk purchased his Twitter stock on March 14, making him the platform’s largest outside shareholder when he publicly chastised it.
Twitter stated that Musk’s ownership share in the firm cannot exceed 14.9% for the duration of his board term, although Musk may attempt to grow his ownership stake over time. Investors appear to be betting on Musk’s ability to exercise control over Twitter. The shares of the social media company jumped 27% and continued to rise after Musk was appointed to the board of directors on Tuesday.
Musk’s investment in Twitter is officially classified as a “passive” stake, meaning it is barely below the 10% level that qualifies a shareholder as an “active” stakeholder. Passive shareholders, on the whole, don’t try to exercise much influence over a company’s decision-making. Musk, however, may be an exception to the rule.
Given Musk’s status as a high-profile and outspoken investor with more than 80 million Twitter followers, the world’s richest person is already in a strong position to influence change. And Twitter’s hasty appointment of Musk to its board of directors demonstrates that the company’s leadership is at least open to Musk’s ideas.
Parag Agrawal implied that Musk may already have support among the company’s other board members in a series of tweets on Tuesday, stating that recent interactions with Musk prompted the group to believe that he would bring great value to our board. Market experts and everyone who has followed Musk’s vibrant Twitter feed, believe that the highly outspoken billionaire’s primary purpose is to reform Twitter’s free speech policies.
Twitter has stepped up its efforts in recent years to combat misinformation and violent or inciting comments on its site, even banning users who break its rules, such as former President Donald Trump. Some critics argue that the firm should go even further along this path. Musk, on the other hand, has chastised Twitter from the opposite side, loudly complaining about regulators attempting to interfere with his own right to free speech on social media.
Musk hasn’t said exactly what steps he wants Twitter to take to promote free speech on the platform, but some of his recent tweets suggest that he might use his new position to push back against the company’s content moderation policies and increased efforts to remove users who break Twitter’s rules.
In other related news, Twitter can now identify automated accounts as “good bots”.
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