Twitter Shares Drop as Musk Declines Spot on Board
In a stunning reversal just days after announcing he would join Twitter’s board, Elon Musk has decided against it.
“Elon has decided not to join our board. I sent a brief note to the company, sharing with you all here,” Twitter CEO Parag Agrawal tweeted on April 10.
The news sent Twitter stock tumbling. It briefly fell over 8% to less than $43 a share at 4 a.m. E.T. before recovering slightly, CNBC reported. Shares were trading at $45 at 8 a.m.
“We announced on Tuesday that Elon would be appointed to the Board contingent on a background check and formal acceptance. Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same morning that he will no longer be joining the board,” Agrawal wrote. “I believe this is for the best.”
Musk bought 73.5 million Twitter shares on March 14 — a 9.2% stake — according to a Securities and Exchange Commission 13G filing released April 4. Over the weekend, Musk tweeted a string of ideas and opinions about Twitter, including whether the social media platform “was dying” and whether Twitter’s subscription service should have an option “to pay in Doge.”
Wedbush Securities analyst Dan Ives wrote in a note sent to GOBankingRates that in his view, the Twitter board and Musk “could not come to an agreement around Musk’s communications with the public … over Twitter, as he likely needed to take a more back seat/quiet stance as part of joining the Board.”
This now goes from a Cinderella story, with Musk joining the Twitter board and keeping his stake under 14.9%, helping move Twitter strategically forward, to a likely “Game of Thrones” battle between Musk and Twitter, with the high likelihood that Musk will take a more hostile stance towards Twitter and further build his active stake in the company, Ives wrote.
Ives added that Musk no longer joining the Twitter board could lead to a host of scenarios, including:
- 1) Joining up with a private equity partner and forcing major strategic changes at Twitter and/or a sale
- 2) Creating more noise and angst for Twitter board and executives with various proposed platform changes
- 3) Musk saying “game over” and reducing his stake
Ives said the first two paths are more likely considering that Wall Street is now focused on Musk’s next move — e.g., his next filing or stake in Twitter — in what Ives called “this ongoing soap opera between Elon and Twitter.”
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