The Associated PressApril 12, 2022 17:02:17 IST
Providence: Tesla CEO Elon Musk’s great Twitter turnaround – where he revealed his huge stake in the social media company, got a seat on its board, made drastic changes publicly and then declined the board’s role – all happened within a week.
But the aftermath could be long-lasting if this millionaire billionaire, who now owns about nine percent of Twitter, takes his ideas to rebuild the social media business.
Why didn’t Mask join the board?
Musk said he told Twitter on Saturday that he would not join its board of directors after being invited five days earlier, according to a financial statement. He did not explain why Saturday’s decision coincided with a barrage of now-deleted tweets from Musk that suggested major changes to the company, such as eliminating advertising – its main source of revenue – and turning its San Francisco headquarters into a homeless shelter.
Explained: Elon Musk joins Twitter board; What does this mean for the company and its users?
Musk has left a few clues on Twitter about his thoughts, such as “likes” a tweet that summarizes events, such as Musk being asked to “play well and not speak freely” from “the biggest shareholder for free speech”.
What is Twitter saying?
Twitter CEO Parag Agarwal said Mask’s non-participation was “for the best” but did not give a clear reason in a statement on Monday. Agarwal also left some hints, noting that Musk was waiting for a background check and suggested that Twitter wanted him on board – not just as a major shareholder – because as a trustee he would be legally and ethically “obliged” to work for the company and our shareholders. The best interest. “
How did Musk form his partnership?
Musk has been tweeting for a long time, but a few months ago he started buying Twitter stock earnestly. He started on January 31, when he bought a little over 620,000 shares at .8 36.83.
From then until April 1, on almost every trading day, he bought thousands or millions of shares.
In all, Musk controlled 73.1 million Twitter shares, or 9.1 percent of the company, according to the most recent count. He has spent $ 2.64 billion to buy them on the open market. The market value of all Twitter accounts, including shares of Musk, is about $ 38 billion.
How big is the share of musk compared to others?
Until investment giant Vanguard Group filed a report late last week, Musk appeared to be Twitter’s largest shareholder, replacing him.
Vanguard controls 10.3 percent of the company through investments made by its mutual funds and ETF suites. Vanguard and other fund giants are often the biggest investors in any company, as retirees and other investors continue to pour money into their index funds. But these fund giants are usually far more outspoken as owners than active investors, who may push for new management teams or major changes in strategy.
What could the mask not do if he joined the board?
If Musk had joined the board, he would have been one of several voices in the strategy discussion. And he may not be able to order the company around.
“The board of directors is responsible for representing shareholders,” said Harry Kramer, a clinical professor at Northwestern University’s Kellogg School of Management and former chairman and CEO of Baxter International. “They are not there to represent themselves.”
Rejecting a seat on Twitter’s board, Musk also broke his promise to keep his Twitter ownership at 14.9 percent or less. Free from this cap, he has the option of creating a larger partnership, where he can try to take over the company or help select a slate of more connected managers with his thinking.
“That 15 percent is an arbitrary number,” Kramer said. “It’s not that if you own 15 percent, you can or can’t do anything else. I’m guessing, but perhaps the thought was: if we bring him in as a director, and he can’t buy more than 15 percent, it literally prevents him from taking control of the company. “
Didn’t Musk say he would be a ‘passive’ investor on Twitter?
When Musk first unveiled his Twitter partnership by filing with the US Securities and Exchange Commission, he did so in a form that is often used by investors who do not plan to push for big changes in a company. But since then he has amended to use a broader form of filing, which does not have the same restrictions.
What does Musk say he will do with his shares?
He said in a filing with regulators on Monday that he owns the shares “for investment purposes.” He said he could buy more, sell more or just hold the shares, depending on the price and other factors.
He added that he could talk to Twitter’s board and its management team from time to time about the strategy, as well as possible mergers, acquisitions or acquisitions, among other things. The widely followed Twitter was sure he could express his views to the company “via social media or other channels”.
Musk said he had “no current plans or objectives”, but that his plans could change at any time.
What does the mask really want?
Much of Musk’s vocal criticism of Twitter in recent weeks has centered around his belief that it falls short of the principle of freedom of speech. The social media platform has angered followers of Donald Trump and other far-right political figures who have suspended their accounts for violating the content standards of violence, hate or harmful misinformation. Mask also has a history of his own tweets that cause legal problems.
But as long as he stays focused, without Mask’s strategic business interests, Twitter is unlikely to make such a big splash, says Enrique Abeta, a former hedge fund manager and editor of Empire Financial Research. Launching a new social media platform is almost impossible, so Twitter offers a digital equivalent of Prime Beachfront Real Estate that requires just a few tinkering and new ideas, ranging from personalization to a subscription-based model with minimal speech restrictions. . , Abeta said.
“He is clearly interested in combining his philosophical beliefs and his interests with economic issues,” he said. “I think it would be very dangerous to release him.”
Can Mask be the CEO of Twitter?
Probably not. Mask – who has already served as CEO of Tesla and SpaceX and has doubled down on a number of other technology ventures – or most investors may not think this is a good idea.
“He would rather be chairman, a spiritual creature, a man who saved Twitter and made $ 10 billion in it,” Abeta said. “He is the richest man in the world. It’s hard to be CEO. “
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