Musk gets Twitter board seat after stake-purchase

TWITTER, Inc. named Elon Musk to its board a day after it was disclosed that the chief executive officer of Tesla, Inc. was the social media company’s largest shareholder.

The appointment ends the possibility of Mr. Musk mounting a takeover of Twitter, capping his ownership at 14.9% during his time on the board, according to a filing with the Securities and Exchange Commission (SEC) on Tuesday. He currently owns 9.2%.

Mr. Musk is one of the biggest personalities on Twitter and has regularly run into trouble on the platform. He is currently seeking to exit a 2018 deal with the SEC that put controls in place related to his tweeting about Tesla.

Twitter CEO Parag Agrawal said in a tweet that he’s “excited” about appointing Mr. Musk to the board. “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’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.

While it’s still unclear exactly what Mr. Musk’s intentions are with Twitter, so far the result of his affiliation has only been good for the beleaguered company, whose shares have tumbled from their 2021 record as investors balked at a combination of a high valuation and potentially disappointing user growth. But the stock rose 27% yesterday as buyers bet Mr. Musk can jump-start Twitter by virtue of his clout as the biggest shareholder and as an influential user on the platform, where he has 80.4 million followers. Twitter was up 1.3% Tuesday afternoon in New York.

“This was a friendly move by the Twitter board to embrace Mr. Musk with open arms as clearly a passive stake is just the start of his involvement in Twitter,” Dan Ives, an analyst at Wedbush Securities, wrote in a note to investors. “Musk joining Twitter will lead to a host of strategic initiatives which could include a range of near-term and long-term possibilities out of the gates for the company still struggling in a social media arms race.”

Twitter was often mocked for appointing board members who rarely tweeted. Mr. Musk is rarely far from controversy on the platform. In 2019, he called a British cave diver a “pedo guy” on Twitter, triggering a defamation lawsuit.

On Monday evening, Mr. Musk asked Twitter users in a poll if they wanted to have an edit button. Last year, he polled Twitter users on whether he should sell 10% of his stake in Tesla, which a majority supported.

As a new board member, “Musk is in a position to influence Twitter’s potential beyond news and live events, and could help draw younger users,” said Mandeep Singh, an analyst at Bloomberg Intelligence. “Though the edit button and removal of bots are some features that Musk has openly advocated for recently, we think board and management changes are likely in the next six months if the company continues to underperform peers.” —