Elon Musk, the world’s richest man and Twitter’s largest shareholder, will no longer join the social media service’s board of directors, the company said late Sunday.
The move capped off a week of reeling at Twitter started by Mr. Musk, 50. On Tuesday, Twitter announced that the billionaire will be appointed to an 11-person board of directors whose term expires in 2024. The invitation to join the board follows Mr. Musk’s accumulation of 9.2. % stake in the company, making him the largest shareholder of the company.
But Parag Agrawal, Twitter’s chief executive officer, tweeted late Sunday that the situation had changed. On Saturday morning, Mr Musk – a dense Twitter user with more than 81 million followers – told the company he would no longer be a board member, Mr. Agrawal said.
“We have and will always value input from our shareholders, whether they are on our board or not,” Mr. Agrawal said in his tweet about the news. . “Elon is our largest shareholder and we will continue to make his comments public.”
No reason was given for the reversal. But Mr Musk tweeted erratically throughout the weekend, polling his followers with scathing questions about the future of the social media company.
In a post on Saturday, Mr. Musk request“Is Twitter dying?”
In another, he suggested turning Twitter’s San Francisco headquarters into a homeless shelter because “nobody showed up anyway.” He also offered a series of reviews of the company’s products, at one point claiming that Twitter remove the ads from complete service. (The majority of Twitter’s revenue comes from advertising.)
Under corporate governance principles, board members are required to act in the best fiduciary interest of a company and its shareholders, which Mr. Agrawal pointed out in his tweet me on Sunday night. He also said that Twitter’s board was “clear about the risks” when Mr. Musk decided to join as director.
By not joining Twitter’s board, Mr. Musk will also no longer be bound by a previous agreement he signed with the company. Under a “stalemate” deal last week, he pledged not to buy more than 14.9% of Twitter’s shares and not to take over the company. That suggests Mr Musk may now continue to increase his stake in the company.
A Twitter spokesman declined to comment on Mr. Agrawal’s post. In a tweet on Sunday night, Mr Musk did not directly address the situation with the Twitter board, but posted an emoji of a hand on his face.
Mr. Musk, the leader of electric car maker Tesla and rocket maker SpaceX, is known for his shrewdness. He often unleashes sarcasm on Twitter, mocking Tesla short sellers and insulting his critics. In 2018, after he mused about making Tesla private in a tweet and incorrectly stated that he had secured funding for the trade, he was fired by the Securities and Exchange Commission. Transaction fined $40 million. Musk later said he disagreed with the SEC’s decision.
When Twitter revealed in an SEC filing on Monday that Mr. Musk had purchased shares of the company, the news was greeted with enthusiasm. As a heavy Twitter user, Mr. Musk’s investment appeared to be a vote of confidence in the company, sending its shares soaring more than 25% that day.
Musk’s purchase of Twitter shares also comes at a delicate time for the company. Twitter has undergone a transformation since Jack Dorsey, a company founder, stepped down as chief executive last year. Mr. Agrawal, chief technology officer, has been appointed to replace him.
Twitter then announced on Tuesday that Mr Musk would become the new Twitter chief with a term on the board set to begin on Saturday.
Mr Agrawal and Mr Dorsey both made comments welcoming Mr Musk to the board. Mr. Musk “will bring tremendous value to our board,” Agrawal tweeted, adding that there have been conversations between the company and Mr. Musk in recent weeks.
“Parag and Elon both lead with heart, and they make an incredible team,” Dorsey wrote on Twitter.
The friendly remarks were reinforced by the way all three men seemed to share similar ideas. At various points, there has been talk of reshaping social media by transferring power entirely to users and away from big companies. Such a move towards “decentralization” would give people more control over their social media feeds and theoretically allow more freedom of expression online. Mr. Musk, Mr. Dorsey and Mr. Agrawal are all outspoken advocates of more free speech.
Mr Musk also tweeted that he looks forward to making “significant improvements to Twitter in the coming months!” He did not elaborate on what those changes might be.
Then there was the reversal over the weekend.
“I believe this is for the best,” Mr Agrawal said in his tweet on Sunday. He added that Twitter employees should “shut down the noise and focus on the job and what we’re doing.”