Elon Musk’s first tweet after the Twitter news:
Oh hi lol
Hard to argue with that.
Now he’s joining Twitter’s board.
“I’m excited to share that we’re appointing @elonmusk to our board,” Twitter CEO Parag Agrawal said in a tweet. “He’s both a passionate believer and intense critic of the service which is exactly what we need on @Twitter, and in the boardroom, to make us stronger in the long-term.”
“I for one, am pleased . . . ”
In response, Musk tweeted: “Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months.”
Note, though, that being on the board will preclude Musk making a bid for the company both while he’s a member and for a short time thereafter. Also, having filed the disclosure he was required to make (more on that later) with the SEC on taking his stake in Twitter as a “passive” investor, he would already be blocked from buying new shares for a limited period in the event he changed that status.
Note this too (also from Reuters):
[Musk] will not have a say on the platform’s moderation, what speech gets banned or whose accounts get restored, the source said – a policy that applies to all board members.
One interesting detail from a Daily Telegraph article on Musk’s attitude to free speech:
Just after Russia’s invasion of Ukraine Musk, who is also chief executive of satellite broadband company Starlink, said he would refuse to block Russian news sources from the service “unless at gunpoint”, adding: “Sorry to be a free speech absolutist.”
He noted that he had been asked to do so by some governments, but not Ukraine’s.
It’s worth adding that Musk has been helping keep Ukrainians online via Starlink.
And there was this tweet from Seth Dillon, the CEO of the Babylon Bee:
Musk reached out to us before he polled his followers about Twitter’s commitment to free speech. He wanted to confirm that we had, in fact, been suspended…
But if Musk wants to avoid helping his opponents in Washington (whose numbers, I suspect, will have multiplied), he needs to avoid handing them the weapons with which to attack him.
The Tesla Inc. chief executive disclosed his 9.2% holdings in a form investors are required to file when they buy more than 5% of a company’s stock, without planning to seek control. But the notice came several days late. It also didn’t include a standard certification that underscores an investor’s passive status…
In a filing Monday, Mr. Musk reported owning almost 73.5 million shares of Twitter, representing a stake valued at $2.9 billion, based on Friday’s closing price. The disclosure says his ownership of Twitter shares exceeded 5% of shares outstanding as of March 14. Investors whose holdings surpass the 5% mark are required to report their stake within 10 calendar days.
Mr. Musk reported the stake in what is known as a 13G report, a filing reserved for passive investors. Shareholders typically include a certification that says they didn’t acquire the securities to change or influence control of the company that issued them. Mr. Musk didn’t include that statement on his form. Instead, he simply wrote: “Not Applicable.”
Twitter’s announcement Tuesday that Mr. Musk would be named a board member could trigger new disclosure demands. As a director, Mr. Musk may need to explain his plans for the investment on a more detailed form that is filed with the SEC, said Keith Higgins, a former director of corporation finance for the commission…
The SEC also could inquire about Mr. Musk’s self-declared stance as a passive shareholder. He hadn’t disclosed his stake before tweeting dissatisfaction with the company’s content-moderation policies in late March, when he raised the question of whether a new social-media platform was needed. That is the kind of statement activist investors sometimes make when they plan to shake up a company…
Howard E. Berkenblit, a partner at law firm Sullivan & Worcester LLP, said regulators could look into those tweets. His statements about Twitter’s speech policies don’t clearly hint at plans to influence or change control of Twitter, Mr. Berkenblit said.
“He is not trying to influence the board or the strategy of the company. That would be his counterargument,” Mr. Berkenblit said. “Like any other shareholder, he is just expressing his opinion. Certainly, the SEC could ask him questions and ask him to defend that.”
Then again, via the New York Times:
Twitter’s announcement on Tuesday [that Musk was join the board] said that other than the agreement that he limit the size of his stake in the company, there were no “arrangements or understandings” between Mr. Musk and Twitter that led to his director role.
“It is theoretically possible” to join a board in a “passive monitoring capacity,” said Joshua Mitts, a professor of corporate law at Columbia Law School. But the presumption is that someone would join a board to effectively exert influence on the company, he said. “It doesn’t mean that you couldn’t try and convince the S.E.C. otherwise, but I think it would be an uphill battle,” Mr. Mitts said.
A lot to watch here.