Elon Musk joins Twitter's board after becoming its largest shareholder
Tesla CEO Elon Musk is joining Twitter's board of directors, a day after disclosing that he owns a 9.2% stake in the social media platform.
Twitter Inc. said in a regulatory filing Tuesday that it entered into an agreement with Musk on Monday that will give the billionaire a seat on its board, with the term expiring at its 2024 annual shareholders meeting.
"Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board," Twitter CEO Parag Agrawal said on Tuesday morning.
Twitter's stock has gained 35% since Musk revealed that he has taken a stake in the social media company, adding $980 million to Musk's fortune. The Tesla leader frequently takes to Twitter to communicate with his 80 million followers, sometimes getting him into trouble. A series of off-the-cuff tweets about taking Tesla private back in 2018 led U.S. securities regulators to appoint a Twitter babysitter for Musk, who must review anything the CEO posts about his company.
Musk is expected to push Twitter on issues of free speech, a topic on which he's been outspoken. Twitter is among several social media platforms trying to strike a balance between free expression and the censoring of content deemed hateful, harmful or false.
Last month, Musk openly mulled starting his own social media platform. "Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?" he said.
His stake in Twitter comes at a time when the company's founder Jack Dorsey has been promoting the idea of an open-source media platform with few controls.
"[W]e believe a primary driver of this investment is Mr. Musk's desire to reshape the platform and make it more open-source with fewer intermediary controls," analysts at Truist Securities said in a research note. "Considering what a small investment this is for him (~1% of net worth), we would not be surprised to see him increase his stake even further, and potentially assume a more active role in the decision-making at the company."
Musk, either alone or as a member of a group, won't be allowed to own more than 14.9% of Twitter's outstanding stock for as long as he's a board member and for 90 days after.
The 9% holding makes him Twitter's largest shareholder. In a tweet, Musk said he was looking forward to making "significant improvements to Twitter in coming months!"
The Associated Press contributed reporting.