Following Elon Musk’s decision to reject the offer of joining the Twitter board, Twitter shares fell in premarket trading Monday shedding over 8 percent to less than $43 a share at 4 a.m. ET from $46.23 it closed on Friday before recovering slightly. At press time the Twitter share at premarket is trading at $45.15.
On Monday, April 4, Tesla and SpaceX CEO, Elon Musk disclosed via financial filings that he’s Twitter’s biggest shareholder, holding a 9.2% stake in the firm. The following day, April 5, Musk and Twitter said he would be joining Twitter’s board.
Musk would have been appointed to Twitter’s board on Saturday, but the world’s richest man informed the company on the day that he would not, in fact, be taking the board seat. At press time Twitter has officially issued an 8-k to notify the public of the departure of a director.
“Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(d) Election of Directors
Pursuant to the April 4, 2022 letter agreement, Elon Musk was invited to serve on the board of directors (the “Board”) of Twitter, Inc. (the “Company”). On April 9, 2022, Mr. Musk informed the Company that he is not joining the Board.”
Agrawal said that Musk remains the largest shareholder of Twitter, and the company will remain open to his input.
“We were excited to collaborate and clear about the risks,” he wrote. “We also believed that having Elon as a fiduciary of the company where he, like all board members, has to act in the best interests of the company and all our shareholders was the best path forward.”
The Twitter CEO did not say whether Musk gave specific reasons for changing his mind about taking on the new obligation or whether it was entirely Musk’s decision.
If Musk had joined the board, he would not be able to acquire more than 14.9% of the company’s shares. Now that he’s no longer joining the board, he can theoretically increase his stake, should he wish to. Some industry experts speculated on Twitter that he may now try to take over the company and rebuild it in the way that he wants to.
The Twitter CEO did not say whether Musk gave specific reasons for changing his mind about taking on the new obligation or whether it was entirely Musk’s decision.
If Musk had joined the board, he would not be able to acquire more than 14.9% of the company’s shares. Now that he’s no longer joining the board, he can theoretically increase his stake, should he wish to. Some industry experts speculated on Twitter that he may now try to take over the company and rebuild it in the way that he wants to.