It is entirely possible that Mr. Musk, Twitter’s largest shareholder, may use the platform for his own personal gain by purchasing additional shares. There are some employees that are upset.
Follow our live coverage of Elon Musk’s attempt to buy Twitter.
The City and County of San Francisco, California On Monday morning, Elon Musk surprised the authorities by sending them a fresh document.
That’s how much of a 180-degree turn he’s made since last week’s statement about his position on Twitter, where his stake stands at 9.2 percent.
According to a document filed with the Securities and Exchange Commission, Mr. Musk has the option to purchase additional Twitter shares and therefore increase his ownership of the company. As mentioned in the document, he was allowed to voice his opinions regarding Twitter on social media or in other venues. As for changing his mind, he said, “he reserves the right to do so whenever he sees fit.”
It was either a promise or a threat. In either case, the filing captured Twitter’s current predicament. It is possible that Mr. Musk, who is Twitter’s largest shareholder and one of its most prominent users, may take advantage of the social media platform against the firm.
According to former Twitter board member and founding team member Jason Goldman, “Twitter has always endured more than its fair share of turmoil. Fortunately, no one was deliberately trolling us with our own product to recruit new board members.
After a week of high-stakes drama, the billionaire filed his lawsuit against the corporation. Twitter reported on Monday that Mr. Musk had accumulated more than $3 billion in stock in the company, according to the company. A day after being invited to join Twitter’s board, he vowed to not own more than 14.9 percent of the firm or take over the company. Then, on Sunday, Twitter abruptly announced that Mr. Musk would not be joining the board of directors anymore.
What exactly transpired between Tesla CEO Elon Musk and the company’s executives and board members remains a mystery, with more than 81 million followers on Twitter. After all these turbulences, it leaves Twitter with an activist investor that no other company has ever had.
Musk, the CEO of Tesla and SpaceX, is well-known for his unpredictability and outspokenness, and he frequently engages in trolling and personal attacks on others via social media platforms like Twitter. With his decision to step down from the board, he freed himself from any obligations to act in the best interests of the firm and its shareholders under corporate governance regulations.
He took advantage of that flexibility on Saturday morning when he informed the corporation of his choice. “Goblin mode,” he declared on Twitter, where he proposed eliminating the “w” from the company’s name and opening its San Francisco offices to the homeless. He later erased some of the posts he had previously made.
Ele Klein, co-chair of the global Shareholder Activism Group at the legal firm Schulte Roth & Zabel, stated, “This is not conventional activism or, honestly, anything like activism that we’ve seen previously. In the words of one observer, “Elon Musk performs stuff no one has seen before.”
Another legal firm’s co-head of the Shareholder Activism practice, Patrick Gadson, expressed compassion for Twitter. “I would never want any director that I represent, or any director at all, to have to deal with this issue,” he stated.
Requests for comment from the media went unanswered. Despite the fact that he hasn’t addressed the issue directly, he did like a tweet that implied Twitter was trying to limit his freedom of speech.
In a post on Sunday, Twitter CEO Parag Agrawal hinted at Musk’s responsibilities as a “fiduciary of the company.” Since the biography of Mr. Musk on its board of directors was still up as of late Sunday, Twitter declined to comment on the matter today.
Since his early days at Tesla, Elon Musk has demonstrated a flagrant disregard for corporate governance standards. When he tweeted that he had obtained money to take Tesla private in 2018, authorities charged him with securities fraud. Later, Mr. Musk agreed to pay the S.E.C. a $20 million fine and resign as chairman of Tesla for three years in exchange for his cooperation.