Elon Musk joining Twitter’s board may be a risky play for the social platform
Elon Musk joined the board of Twitter on Tuesday shortly after he became the company’s largest shareholder, with a 9.2% stake. While Twitter’s stock had its largest one-day rise ever, following news of Musk’s board appointment, the company has now introduced some risk and tension to the organization.
Musk is the only individual investor among Twitter’s top 10 shareholders, and while its founder Jack Dorsey is still a board member, he holds just a 2% stake in the company. Though Musk has been largely critical of the platform, Dorsey tweeted on Tuesday, “I’ve wanted Elon on the board for a long time.” In true Musk fashion, the eccentric billionaire said he’s looking forward to making “significant improvements to Twitter” in coming months, later tweeting a joke about him smoking at the next board meeting.
Dan Ives, a Wedbush Securities analyst, told MarketWatch that Twitter essentially had two options: be hostile or embrace Musk. “I think that is the smart strategy, rather than going after this in a hostile way that would not end well.”
Musk’s addition to Twitter’s board will certainly bring technology and engineering expertise, but it’s also likely to come with challenges for the social platform’s board directors and corporate leaders.
Eroding employee trust
Employees have expressed concern over Musk’s appointment to Twitter’s board, citing anti-transgender memes he’s shared on Twitter and his criticism of COVID-19 prevention measures as a threat to company culture. Some employees have also noted that Twitter’s board is more involved in the company’s day-to-day operations than at other tech companies, meaning Musk, a “free speech absolutist,” is likely to wield heavier influence than a typical board member.
Twitter users, including some politicians ,are campaigning for Musk to reinstate former president Donald Trump on the platform. Though Twitter has denied any imminent changes on that front, Sam Abuelsamid, a Guidehouse Insights analyst who covers Musk’s leadership at Tesla, told Reuters, “I wouldn’t be surprised if Twitter restores Trump’s account now that Elon owns nearly 10% of the company.” Twitter said it permanently suspended Trump in January 2021 “due to the risk of further incitement of violence” following the events of January 6th.
Musk’s tweets have repeatedly landed him in hot water, leading to SEC investigations and fines. The disclosure of his stake in Twitter may lead to further punitive action; he initially disclosed a passive stake before changing his status to an active investor, and did not file the disclosure within 10 days of making the stock purchase, per SEC rules.
“I can only imagine what Twitter will have to contend with,” Elliot Schreiber, a former communications executive at DuPont, Bayer, and Nortel Networks and professor at Florida Atlantic University, tells Modern Board. “The Tesla board has had difficulty controlling Musk and his comments have caused them some embarrassment. Now, he has a broader platform not only as a board member but more so as a large investor. It will be difficult to control him and have him think about what he says being a reflection on Twitter.”
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