Last week we discussed how Elon Musk joined on to twitter, purchasing a near 10% stake in the company to become the largest shareholder. Initially, Elon had committed to joining Twitter’s board of directors, however, he has recently backtracked on this plan. Even last week there was an issue with the entire process, specifically, how Elon did not execute purchase correctly, missing requirements like a certificate that states his role as a solely passive investor. It’s reported that on his form, he answered “Not Applicable,” which is quite vague. Additionally, the SEC is questioning his intent when it comes to his stake in Twitter. Although he claims to be a passive investor, his tweets often radiate his own opinions on where the company should go and how to improve it. Musk’s actions warrant this well with one tweet from last week asking Twitter users how they felt about Twitter and its commitment to free speech.
You may be wondering, why did Elon Musk suddenly decide to not join the Board of Twitter? Well, it’s hard to pinpoint exactly why he may have backtracked on the plan; however, it is likely that the aforementioned paperwork issues could be involved. Another explanation could be that he planned to buy more shares in the future. Indeed, by signing up as a board member Elon would face a ceiling of 14.9% stake in the company. What do you think about Twitter’s future without Elon on the board but as a major shareholder? And will you be investing into twitter?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.