Billionaire Elon Musk has decided not to join the board of one of social media’s titans, Twitter, the San Francisco-based company’s CEO, Parag Agrawal, said Sunday night.
The announcement came as a surprise after Musk, the CEO of electric car maker Tesla, said he would be joining the board following his stock purchase of about 9.2 percent of the company.
“Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months!” Musk tweeted April 4.
On Sunday Agrawal tweeted, “Elon has decided not to join our board.”
He included a memo he sent to the company that noted Musk would be subject to a background check and, once appointed, would have to be loyal to the financial interests of the company.
The tech investor’s loyalty to entities outside his orbit, which also includes his control of space travel startup SpaceX and tunneling concern the Boring Company, is a fair target of concern, given his record of using his bully pulpit to say things that turned out to boost stocks he holds.
Twitter may have brought him bad news: His self-promotion and criticisms are his own business if he’s not a board member. On it, however, he might have to take his voice off Ludicrous Mode and start looking out for other shareholders.
“We were excited to collaborate and clear about the risks,” Agrawal wrote in the memo, explaining how both parties wanted Musk onboard.
“We also believed that having Elon as a fiduciary of the company where he, like all board members, has to act in the best interests of the company and all our shareholders, was the best path forward,” Agrawal said.
The CEO said the only things between Musk and a board seat following the official announcement April 5 that he was joining Twitter’s corporate governance were a background check and “formal acceptance” from the company.
But there were other strings attached.
An April 5 SEC filing from Twitter on Musk’s expected board membership said he would be limited to a 14.9 percent stake in the company, generally speaking, as long as he had a governance seat. Now that he’s walking away from the board position, he can theoretically increase his position as he wishes.
The Twitter chief said board membership was to have been finalized Saturday, but on Saturday morning Musk declined the position.
Read Full Story
NBC News Rating
Discover more from News Facts Network
Subscribe to get the latest posts sent to your email.
