APRIL 11 (Reuters) – Elon Musk rejected Twitter’s ad (TWTR.N) He offered to join its board of directors, a surprising turnaround even as he suggested ideas in a barrage of tweets that range from removing ads to dropping the letter “w” in the social media company’s name.
Neither Twitter chief Parag Agrawal nor Musk revealed the reason for the rejection, despite Tesla (TSLA.O) Boss later deleted those tweets, which also included plans like the authentication check mark for $3 a month Twitter subscribers.
In a note posted to the site on Sunday, Agrawal said the board had several discussions with Musk, while warning of “distracting factors going forward.”
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The latest twist in the Twitter saga has sparked talk of everything from a possible takeover to Musk’s attempt to walk away from SEC scrutiny.
Musk was expected to join the board of directors on April 9 after disclosing his 9.1% stake in Twitter, but the role would have limited his stake to 14.9%.
Sources told Reuters that Musk had asked Twitter for a seat on the board of directors even before the company was invited.
With the rejection, Musk, now the company’s largest shareholder, was free to raise his stake above that limit.
“I think this is the best,” Agrawal said in the note, referring to Musk’s refusal. “There will be distractions in the future, but our goals and priorities remain unchanged.” (https://bit.ly/3usFqhe)
Musk, whose net worth Forbes estimated at $274 billion, responded with an emoticon on Twitter that was later deleted.
“You have to assume that over the weekend there was quite a bit of wrinkling, and it seemed like he was pushing the boundaries to see how far he could go,” said Danny Hewson, analyst at AJ Bell.
“He never wanted to be restricted the way Twitter clearly wants to restrict him as a board member.”
Musk, who calls himself an absolute free-lancer and criticizes Twitter, revealed the stake on April 4 and said he plans to make major improvements to the social media platform. Read more
CFRA Research Analyst Angelo Zino wrote in a client note that Musk’s latest decision opens up the possibility for him to take a larger position and possibly make an overall bid.
“We thought the stock cap and board seat were originally intended to tie Musk’s hands in many ways, and we think it’s unlikely it will be the kind of individuals who will now sell his stake and walk away,” Zino added.
Twitter shares were marginally higher at $46.40 in volatile trading on Monday. They rose more than 27% on April 4 when Musk disclosed his stake, but has since lost about 7.5% to Friday’s close.
Company sources told Reuters that news of Musk taking a seat on the board of directors has caused some Twitter employees to panic about the future of the social media company’s ability to edit content. Read more
Before taking the stake, Musk conducted a Twitter poll asking users if they thought Twitter adheres to the principle of free speech.
“I think what he’s realizing is that by being on the board, his voice is going to be dampened and that’s definitely the last thing he wants,” Wells Fargo analyst Brian Fitzgerald said.
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Additional reporting by Abinaya Vijayaraghavan, Nivedita Balu and Gopi Babu in Bengaluru; Editing by Arun Koyyur, Miyoung Kim, Edmund Klamann and Anil D’Silva
Our criteria: Thomson Reuters Trust Principles.
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