UPDATE 11/04/22 11:30 — Parag Agrawal tweeted early this morning that Elon Musk will no longer be joining Twitter’s board of directors, saying “I believe this is for the best”. Someone here might need to get a copy of Joseph Bikart’s The Art of Decision Making.
UPDATE 05/04/22 15:37 — Twitter CEO Parag Agrawal tweeted that he, along with the other board members, would be joined by Musk on the board of directors. So we guess that answers our “how will the world’s most popular microblogging platform change” question.
Original Story: Twitter’s biggest critic, Elon Musk, is now the largest single shareholder of the company. According to a regulatory filing, Elon Musk now owns 9.2% of Twitter stock. That’s 73,486,938 shares, almost four times as much as ex-CEO and co-founder Jack Dorsey.
And it only cost him a cool $2.89 billion, based on Twitter’s recent stock prices. Soon after the stock purchase went public Twitter shares shot up 25%, with Tesla stock rising ever so slightly too.
It was only last week when Elon Musk was sharing his ideas for an entirely new social media platform altogether. How times change. Now the question is: how will the world’s most popular microblogging platform change?
If you can’t beat ’em…
What happens when the world’s most eccentric billionaire has a say in one of the largest social media platforms ever? At the moment, not much. But this may not always be the case.
For the time being, Elon Musk’s 9% control is only meant to be passive. When Musk filed the necessary paperwork to perform the buy, he had a choice to make. Either stay passive by filing a 13G form (it’s an American financial thing), meaning he would have little to no say about how the company may run for the time being. Buyers vying for a stronger hand within the company must file the SEC’s 13D form (ditto) within 10 days after the sale is approved.
Musk chose the passive route. But when has Elon Musk ever been known to behave passively?
Wedbush analyst and MD Dan Ives, speaking to Yahoo! Finance, said, “This is just the appetizer. Ultimately, we believe he will have an active stake over the coming weeks or months. This is just a start. I think he will have a broader strategic focus on Twitter, whether it’s changing the slate, changing the management team, or ultimately a buyout.”
“The idea that Elon Musk falls within a passive category is probably a stretch. He’s not the most passive guy,” explained Jill Fisch, a securities law professor at the University of Pennsylvania. “One has to ask the question: Is Elon Musk really going to be happy with a stake of this size, and remaining passive?”
Fisch also noted that Musk’s stake is definitely liable to change. Filing a 13G still allows room for investors to change their minds as opposed to the more official 13D. There isn’t much time for him to make alterations, even if Musk sorts out his paperwork. Twitter’s annual meeting takes place on 25 May. That’s not much time to alter a company’s direction, even if you’re in a position to do so.
“He’s not trying to get board seats, take over the board or push the company to sell itself,” said Eleazer Klein, a partner at law firm Schulte Roth & Zabel. “He’s not trying to be an activist shareholder. But you can be influential without being an activist. He can certainly talk to the company, and say ‘I’m concerned about crypto and as a shareholder I want you to know my views.”
If this is the case, it means that soon Musk may have much more control over Twitter than we initially thought.
Changes for Twitter
The biggest question on everyone’s mind is ‘What will Elon Musk change?’ Just lately, the head of Tesla and SpaceX has been especially critical of the platform. It seems strange to take that position while also being its largest shareholder, unless you’re planning some alterations.
Musk’s Twitter profile may give some hints as to what he has in store for the platform. Yesterday, Musk tweeted a poll asking his followers whether they wanted an edit button or not. Not surprisingly, 73% of voters chose ‘yes’, which means Musk may see this as the first order of business the second he is given any real control.
Do you want an edit button?
— Elon Musk (@elonmusk) April 5, 2022
The next clue isn’t as simple. Of late, Musk has been especially vocal about Twitter policies concerning free speech. As early as last week Monday Musk was questioning his followers whether they believed Twitter adhered to free speech policies, with the answer being a ‘no’. This means that Musk may change the policy on banning accounts – such as Donald Trump.
It seems that, regardless of whatever form Musk filed, changes are probably coming to Twitter. It’s mostly a question of ‘when’. Whether they’re for better or worse remains to be seen. But, absent tech-billionaire-level money, there’s not much we can do about it. We can just sit and watch the show. Or dumpster fire, as the case may be.
Source: Yahoo! Finance