by Twitter is appointing Tesla CEO Elon Musk to its board of directors, according to a filing with the US Securities and Exchange Commission. Musk will serve as Class II director until 2024. This is one type of position that can be used as an anti-takeover measure.
In pair tweetsTwitter CEO Parag Agrawal confirmed Musk’s new role on the board. He called Musk “both an ardent believer and an intense critic of the ministry” and said he would “bring great value to our board.” musk answered via Twitter and said he looks forward to “significantly improving Twitter in the coming months!”
He is both an ardent believer and intense critic of the ministry, which is exactly what we need @twitter, and in the boardroom to make us stronger in the long term. Welcome Elon!
— Parag Agrawal (@paraga) April 5, 2022
“The Company will appoint Mr. Musk to the Company’s board of directors (the “Board”) to serve as a Class II director, with a term of office expiring at the Company’s annual meeting in 2024,” the filing reads . “While Mr. Musk serves on the Board of Directors and for the 90 days thereafter, Mr. Musk will not, alone or as a member of any group, have beneficial ownership of more than 14.9% of the Company’s then outstanding common stock, including for these purposes of economic involvement through derivative securities, swaps or hedging transactions.”
On Monday, Musk announced via an SEC filing that he had acquired a 9.2 percent stake in Twitter, despite his complaints about freedom of expression on the platform. Musk’s acquisition makes him the company’s largest single shareholder. Shortly after making this disclosure, Musk asked his followers to create an “edit” button. agrawal replied via tweet “The consequences of this poll will be important,” and he warned users to “vote carefully.”
We look forward to working with Parag & Twitter Board to make significant improvements to Twitter in the coming months!
— Elon Musk (@elonmusk) April 5, 2022
Jack Dorsey, the former CEO of Twitter, expressed “happy” that Musk is joining Twitter’s board of directors, saying that “he cares deeply about our world and Twitter’s role in it.” Dorsey stepped down as CEO in November 2021 but will remain on the board until sometime in May.
I’m really happy that Elon is joining the Twitter board! He cares deeply about our world and Twitter’s role in it.
Parag and Elon both lead with their hearts and they will make an incredible team. https://t.co/T4rWEJFAes
— jack⚡️ (@jack) April 5, 2022
As CNBC noted, Musk’s investment could spark more trouble with the SEC. The SEC requires anyone who owns more than 5 percent of the company to disclose their purchase within 10 days. Musk first acquired the shares on March 14, 2022, and didn’t announce that information until April 4, 2022 — 21 days later. According to CNBC, the SEC’s fines for this type of violation are not usually exorbitant (at least for the world’s richest man) and tend to hover around the $100,000 mark.
Musk has argued with the SEC several times over the content of his tweets. In 2018, the SEC sued Musk for tweeting that he had “secured the funding” to take Tesla private. A judge later ordered a lawyer to approve Musk’s tweets before publishing them. The SEC is currently investigating whether Musk should sell 10 percent of his Tesla shares because of his tweet poll.
