Twitter takeover planned: That’s why Tesla boss Elon Musk could have rejected the post on the board of directors

Elon Musk is now the largest Twitter shareholder
Withdrawal after being appointed to the Board of Directors
acquisition planned

Twitter fan Elon Musk launches free speech poll

Tesla CEO Elon Musk has been one of the biggest fans of the short message service Twitter for some time. The entrepreneur’s tweets have had far-reaching consequences in the past, for example when Musk expressed the idea of ​​delisting the shares of the electric car maker from the stock exchange in 2018, which at times drove the price of Tesla paper into double digits and resulted in a brief suspension of trading. Further news on the social network, in which the company manager spoke positively about the cryptocurrencies Bitcoin and Dogecoin, also caused price jumps for the two Internet coins.

It wasn’t until the end of March that Musk started a survey of his followers via Twitter. “Freedom of speech is essential for a functioning democracy. Does Twitter strictly adhere to this principle?” While 29.6 percent of the more than two million participants agreed that Twitter guarantees freedom of speech, 70.4 percent voted “no”. Musk warned his followers that the vote will have far-reaching consequences and that responses should only be truthful.

Musk stocks up on Twitter stocks

A few days later, it was announced that Musk, with a 9.2 percent share of all Twitter shares, was now the largest shareholder in the microblogging service. According to a report by the US Securities and Exchange Commission, Musk bought 73.49 million Twitter shares in March. The news was well received by investors: the Twitter paper climbed more than 27 percent by the close of trading on April 4, the day of the announcement. Shortly thereafter, Twitter CEO Parag Agrawal welcomed the entrepreneur to the company’s board of directors. “He’s both a passionate advocate and a fierce critic of the service. This is exactly what we need on Twitter and in the boardroom to make us stronger in the long run,” Agrawal said in an announcement tweet.

Hes both a passionate believer and intense critic of the service which is exactly what we need on @twitter, and in the boardroom, to make us stronger in the long term. Welcome Elon!

– Parag Agrawal (@paraga) April 5, 2022

And Musk also seemed to have taken his new role seriously right after the deal was announced and asked the Twitter fan base if they were interested in an edit button. It is currently not possible to edit tweets again after they have been sent. However, this idea didn’t seem to have grown on Musk’s crap: Shortly thereafter, the Twitter communications team announced that they had been working on such a feature for the past year and that it would be tested in the coming months.

Musk turns down Twitter board seat

Shortly after being appointed to the board of directors, Musk backed down: As Agrawal explained via Twitter, the Tesla boss had decided against the position. “The Board of Directors and I have had many discussions regarding Elon’s addition to the Board of Directors and with Elon itself,” said the CEO. “We were excited to work together and aware of the risks. We also felt that Elon as the company’s trustee who, like all board members, must act in the best interests of the company and all shareholders, is the best way forward. ” But despite Musk’s rejection, Twitter is looking forward to an open dialogue with the entrepreneur. “We have and always will value the contributions of our shareholders, whether they sit on the Board of Directors or not. Elon is our largest shareholder and we will continue to be open to their contribution,” it continued.

Elon has decided not to join our board. I sent a letter note to the company, sharing with you all here. pic.twitter.com/lfrXACavvk

– Parag Agrawal (@paraga) April 11, 2022

Background check as a knockout criterion?

But what is behind Musk’s retreat? As Agrawal writes in his statement, joining the company’s board of directors would also have meant a background check on Musk. Numerous Twitter users initially suspected that Musk did not want to face this and therefore gave up his seat on the board of directors in order not to have to reveal any details about himself, as the finance portal “Moneycontrol” reports.

However, there is a hint of another possible reason why the Tesla boss and Twitter fan turned down the post. After the Twitter leadership invited Musk to the board of directors, he filed an updated 13D form with the SEC regarding his transaction. A section on share purchase purposes, for example, states that Musk will be appointed to the board of directors and may not own more than 14.9 percent of all Twitter stock while on the board and for 90 days thereafter. As “CNBC” reports, numerous analysts are now of the opinion that Musk wants to raise his stake in Twitter shares above this limit in the long term in order to gain more control over the company.

Musk “hostile takeover” possible

Will this make Twitter the next Musk company to join Tesla, SpaceX and The Boring Company? As Don Bilson of Gordon Haskett Research Advisors wrote in a note, according to CNBC, Musk’s resignation may have saved Twitter leadership a lot of trouble because it’s entirely possible that he’s releasing information that is only discussed at board level. “The flip side of the coin is that TWTR has to deal with a wild card investor who already owns 9% of the company and has the funds to buy the remaining 91%. As volatile as Musk is, we could make such a move in Shortly see. Or we will never see it, “said the strategist. To stave off a possible “hostile takeover,” Agrawal may find it useful to maintain a good relationship with Musk. “It’s going to be quite difficult to commit to an investment thesis because you never know which direction the wind will blow,” Bilson told the broadcaster. “I don’t think there’s anything off the agenda with this man.”

“Game of Thrones” fight instead of Cinderella

And Wedbush analyst Dan Ives also sees the possibility of a hostile takeover as a given. “This is clearly going to be an unfriendly situation,” the analyst told Squawk Box host Andrew Ross Sorkin. “Instead of Musk sitting in the corner in the boardroom and just saying no or agreeing with certain board nominees, I think it’s really getting to the point now that we’re going to see in the coming days if he becomes more hostile and active – on that the stock market is concentrating.” According to “Barrons”, the strategist even spoke of a conflict of epic proportions. “From a Cinderella story of Musk joining the Twitter board and keeping his stake below 14.9% to strategically move Twitter forward, it’s now likely to become a ‘Game of Thrones’ battle between Musk and Twitter with the high likelihood that Elon will take a more hostile stance towards Twitter and continue to increase its active stake in the company,” the portal quoted Ives as saying.

Takeover attempt started

And indeed: As the German Press Agency reported on Thursday, the group leader now also wants to include Twitter among his companies. So he offers all shareholders of the service 54.00 US dollars per share and thus more than the paper was last worth. The company is then to be taken off the stock exchange. However, it is still unclear whether Musk’s plan will work.

Musk could have gotten into trouble with Twitter entry

So it remains to be seen what role Musk will play in the short message service in the future. What is certain, however, is that the entrepreneur had already stepped on some people’s toes with his Twitter entry. Not only could the transaction alert the SEC and lead to an investigation into price manipulation, a Twitter shareholder has now filed a class action lawsuit against the jack-of-all-trades. According to a report by the German Press Agency, the plaintiff accuses Musk of not having published the purchase of his block of shares within the statutory notification period in order to artificially keep the share price at a low level, which favored further acquisitions.

Twitter has a number of important dates coming up over the next few weeks. While the tech group is opening the books on the first quarter of 2022 on April 28, the annual general meeting of shareholders is on May 25. However, it is still unclear whether and to what extent Musk will participate there.

Editorial office finanzen.net

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