Elon Musk Joins Twitter’s Board of Directors - April 6, 2022

On April 6, 2022, Twitter announced that Elon Musk, the billionaire entrepreneur and CEO of companies such as Tesla and SpaceX, would join its board of directors. This announcement came shortly after Musk became Twitter’s largest individual shareholder. Musk acquired a 9.2% stake in the social media company, amounting to approximately 73.5 million shares valued at roughly $2.89 billion based on Twitter’s closing price at the time.

Background Context

Prior to this development, Elon Musk had been an active and influential presence on Twitter, known for his frequent and often controversial tweets. His interactions on the platform ranged from business insights to personal musings, often resulting in significant public and media reactions.

In March 2022, Musk polled his followers on Twitter about their thoughts on the platform’s commitment to free speech, which Musk described as essential for a functioning democracy. Following this poll, speculation rose about his potential involvement in the company’s operations or governance.

Key Details of the Board Appointment

• Board Position: Elon Musk was appointed to Twitter’s board as a Class II director with a term expiring at the annual meeting of stockholders in 2024.
• Stakeholder Influence: His stake marked him as Twitter’s largest shareholder, surpassing even institutional investors.
• Stake Retention Agreement: As part of his appointment, Musk agreed not to acquire more than 14.9% of the company’s stocks during his tenure on the board and for 90 days thereafter.

Broader Significance

Elon Musk’s appointment to the Twitter board attracted widespread attention due to his distinctive public persona and significant following on the platform, where he had tens of millions of followers. Many viewed his board membership as potentially influencing Twitter’s future strategy, particularly regarding content moderation policies and feature developments.

Outcomes

The announcement was met with a mixture of enthusiasm and skepticism from the public and investors, as Twitter’s stock saw fluctuations reflecting market reactions to Musk’s potential impact on the company. His appointment was seen as a move that could either lead to innovation or volatility given Musk’s history of candid and direct communication style.

However, Musk’s term on Twitter’s board was short-lived, as he later declined the offer, deciding not to join the board after initially agreeing to do so.

Twitter’s corporate landscape and Musk’s relationship with the platform continued to evolve rapidly in the following months, ultimately leading to Musk’s acquisition of the company later in the year.