Mr. Musk, the firm’s largest stakeholder, has the option to purchase further shares in the company and might use the platform against the corporation. Some staff are displeased with the decision.
On Monday morning, Elon Musk delivered the government a shocking new document, which was received in the early hours of the morning.
His apparent intentions toward Twitter, in which he has built a 9.2 percent stake, were set out in the letter, which highlighted how dramatically his attitude had shifted from a week earlier.
According to the paperwork, which was filed with the Securities and Exchange Commission, Mr. Musk has the option to purchase more shares of Twitter in order to enhance his control of the firm if he so chooses. According to the contract, he was allowed to voice his opinions about Twitter on social media or via other avenues. In addition, he said that he had the right to “alter his intentions at any moment, as he thinks necessary.”
It was either a promise or a threat, depending on your perspective. In any case, the filing perfectly highlighted the perilous predicament in which Twitter now finds itself. Mr. Musk, 50, is Twitter’s biggest shareholder and one of the social media network’s most prominent users. He has the potential to use the social media platform against the firm and perhaps purchase enough shares to take over the company.
In the words of Jason Goldman, who was a member of Twitter’s founding team and had previously served on its board of directors, “Twitter has always suffered from more than its fair share of dysfunction.” “At the very least, we weren’t being aggressively trolled by potential board members who were utilising the software we developed.”
The filing came after a week of high-stakes drama between the billionaire and the corporation, according to sources. Twitter reported on Monday that Mr. Musk had amassed a substantial amount of shares in the firm, which is currently valued at more than $3 billion. A day later, he was asked to join Twitter’s 11-member board of directors, where he committed not to control more than 14.9 percent of the business and not to attempt to take it over. Then, on Sunday, Twitter said that all of those bets were off and that Mr. Musk would not be appointed to the board of directors of the company.
It’s unclear what precisely transpired between Mr. Musk, who has more than 81 million followers on Twitter, and the company’s executives and board members during the meeting. The company, which has withstood founder infighting, boardroom revolts, and outside shareholder ire, now has an activist investor unlike any other, as a result of this development.
Mr. Musk, who also serves as the CEO of the electric vehicle manufacturer Tesla and the rocket business SpaceX, is well-known for being unpredictable and outspoken, often taking to Twitter to criticise, insult, and ridicule others. His removal from the board of directors freed him from corporate governance regulations that would have compelled him to behave in the company’s and shareholders’ best interests if he had continued to serve on the board.
After his decision was relayed to the firm on Saturday morning, Mr. Musk took advantage of his newfound independence. He declared on Twitter that he was in “goblin mode,” and he proposed a number of modifications, including eliminating the “w” from the company’s name to make it more vulgar and opening the company’s San Francisco headquarters to serve as a homeless shelter. Some of the postings were subsequently removed by him.
Similarly, Patrick Gadson, co-head of the Shareholder Activism practise at Vinson & Elkins, a different legal firm, expressed compassion for Twitter’s situation. I would never want any of the directors that I represent, or any filmmaker at all, to have to deal with anything like this, says the director in question.
Requests for response from Mr. Musk were unanswered by press time. He has not directly addressed the matter with Twitter’s board of directors, but he did like a tweet that implied the business was attempting to limit his free speech rights. He has not directly addressed the situation regarding the board of directors.
According to a blog post published on Sunday, Parag Agrawal, Twitter’s chief executive, referred to how Mr. Musk would have been required to act as a “fiduciary of the firm.” Asked for comment on Monday, Twitter, which released a biography of Mr. Musk as a member of its board of directors that was still public late Sunday, refused to do so.