Elon Musk not too prolonged within the past disclosed a 9.2% stake in Twitter, making the Tesla and SpaceX CEO the social media platform’s biggest shareholder. Musk’s stake turned into notorious by Twitter’s prime brass, who rapidly offered him a board seat. However on April 10, Twitter CEO Parag Agrawal shared that Musk declined the offer.
Twitter’s board seat, naturally, came with strings connected: Accepting would possess made Musk a firm insider by US regulatory standards, and eager extra limits on how he could well per chance alternate inventory and communicate publicly about Twitter. Taking the board seat would possess furthermore intended pledging not to salvage more than 14.9% of Twitter’s inventory while serving within the feature, or for 90 days afterward. The firm’s offer turned into not handiest a peace offering, nevertheless a mode to rein within the impulsive Musk, who has a penchant for making low jokes, posting memes, and trolling folk on Twitter.
In that sense, that it is seemingly you’ll well per chance impart Musk’s dedication is fully in persona. Elon Musk doesn’t possess to possess Twitter, alter it, or exert ideological have an effect on over the firm’s sing material moderation policies. He merely wishes to tweet on and about his favorite internet dwelling, with minimal input from a “Twitter sitter,” from Twitter executives, or from the US Securities and Alternate Price (SEC).
Elon Musk’s troubles with the SEC
Musk has prolonged been at battle with the SEC over his tweets. The Tesla CEO has, on a quantity of occasions, tweeted statements that led the company to prevent shopping and selling on Tesla inventory. And in 2018, the SEC sued Musk over a tweet that falsely indicated he had secured funding to desire Tesla internal most.
In the resulting settlement, Musk agreed to pay an attractive and step down as Tesla chairman for three years. He furthermore agreed to the “Twitter sitter,” a attorney who purportedly reports all of Musk’s tweets about Tesla ahead of he posts them. In a 2018 interview with 60 Minutes, Musk mentioned he has no admire for the SEC and that no lawyers ever review his tweets; he’s now suing the SEC to pick the Twitter sitter from the settlement settlement.
In acquiring his stake in Twitter, Musk could well furthermore merely possess furthermore flee afoul of securities rules: He turned into two weeks delinquent in disclosing the investment, per SEC solutions, and filed as a passive investor, for that reason no hobby in influencing the firm. Musk then spent the week tweeting on and off relating to the entire solutions Twitter could well per chance trade. He has advocated for an edit button, altering the price of Twitter’s subscription product, striking off commercials from the platform, and—on account of he can’t support himself from making wearisome jokes—deleting the ‘w’ from the title Twitter.
Why Elon Musk turned into down a Twitter board seat
In the hours after Agrawal launched that Musk would not join Twitter’s board, the eccentric billionaire deleted quite lots of his unusual tweets relating to the social media platform. However it appears determined that accepting the board seat would possess jeopardized what matters most to Musk—trolling everybody on Twitter by Twitter, including its executives.
As a board member, Musk would possess had entry to confidential files, which could well likely likely be subject to Legislation Fine Disclosure (Reg FD), the same regulation that has restricted his Tesla tweeting, per Adam Pritchard, a securities rules professor at College of Michigan Legislation College.
The board seat would possess furthermore put a bigger SEC goal on Musk, who at this level can’t salvage more Twitter inventory without tripping an extra regulatory wire. The SEC considers someone with 10% fairness in a firm an “insider,” who has to follow stringent solutions about looking to search out and selling fresh inventory.
It’s determined that Musk isn’t but prepared to invent these alternate-offs. As Pritchard notes, “as far as tweeting, he is free to present what he wants if he is just not in actual fact on the board.”
