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Twitter announced this morning via a tweet and a filing with the U.S. Securities and Exchange Commission that Elon Musk, best known for his work at PayPal, SpaceX, and Tesla, is joining the social network’s board of directors.
News broke earlier in the week that Musk had purchased a more than 9% stake in the social media company after criticizing its speech policies publicly in late March. The news that the technology entrepreneur had purchased several billion dollars worth of Twitter stock sent shares of the company sharply higher yesterday.
Twitter is again appreciating this morning, rising more than 5% in pre-market trading.
Twitter CEO Parag Agrawal announced the news this morning in a batch of tweets:
I’m excited to share that we’re appointing @elonmusk to our board! Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board.
— Parag Agrawal (@paraga) April 5, 2022
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. Welcome Elon!
— Parag Agrawal (@paraga) April 5, 2022
According to a filing from the company, Twitter will appoint Musk to the company’s board as a “Class II director with a term expiring at the Company’s 2024 Annual Meeting of Stockholders,” pursuant to certain conditions. A key rule set in place by the agreement is that “so long as Mr. Musk is serving on the Board and for 90 days thereafter, Mr. Musk will not, either alone or as a member of a group, become the beneficial owner of more than 14.9% of the Company’s common stock outstanding at such time.”
More simply, Twitter has set up its arrangement with Musk so that he can’t own even 15% of the company while on its board, limiting his ability to push the social service around. Still, a huge stake, a fast markup, and a board seat? Musk is not having such a bad week.
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Elon gives $2.9B gift to Twitter, its employees, and himself. What’s next?
