Elon Musk will serve on
board of directors, the company said in a filing on Tuesday, a day after the billionaire and
The company appointed Musk to the board as a Class II director with a term expiring at the company’s 2024 annual shareholder meeting.
Musk, either alone or as a member of a group, will not be able to become a beneficial owner of more than 14.9% of Twitter (ticker: TWTR) stock for as long as he sits on the board and 90 days after, according to the filing. This includes economic exposure through derivative securities, swaps, or hedging transactions, the filing added.
“I’m excited to share that we’re appointing @elonmusk to our board!” tweeted Twitter CEO Parag Agrawal. “Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our 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,” Agrawal added.
Musk’s stake trumps that of other shareholders, including Twitter co-founder Jack Dorsey, who owns 2.3%.
“I’m really happy Elon is joining the Twitter board! He cares deeply about our world and Twitter’s role in it,” Dorsey tweeted on Tuesday.
As the largest shareholder and member of the board, Musk could have significant sway over the company’s business. In the past, Musk has criticized Twitter’s moderation of users’ speech, leading some to believe he may be looking to influence the company’s policy regarding speech moderation. But all in all, investors were responding positively to the news.
Twitter stock was up 4.4% on Tuesday. The shares gained 27% on Monday — the largest single-day percentage gain on record — after Musk announced his stake.
“This was a friendly move by the Twitter board to embrace Musk with open arms as clearly a passive stake is just the start of his involvement in Twitter,” wrote Wedbush analyst Daniel Ives on Tuesday. “We believe 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.”
On Monday, Musk posted a poll to his Twitter feed, asking users whether they wanted an edit button.
“Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months!” Musk tweeted on Tuesday.
Write to Sabrina Escobar at sabrina.esc[email protected]