Economic news of April 11, 2022

Twitter said Sunday evening that Elon Musk, its largest shareholder, would not join its board of directors. Credit… Suzanne Cordeiro/A...


Credit…Suzanne Cordeiro/Agence France-Presse — Getty Images

Elon MuskThe world’s richest man and Twitter’s biggest shareholder will no longer join the social media service’s board of directors, the company announced on Sunday.

The move capped a whirlwind week on Twitter that was sparked by Mr Musk, 50. On Tuesday, Twitter announced that the billionaire would be appointed to its 11-person board for a term that expires in 2024. The invitation to join the board followed that of Mr Musk accumulating a 9.2% interest in the company, making him its main shareholder.

But Parag Agrawal, the chief executive of Twitter, tweeted on Sunday evening that the situation had changed. On Saturday morning, Mr Musk – who is a heavy Twitter user with more than 81 million followers – told the company he would no longer become a member of the board, Mr Agrawal said.

“We and will always appreciate feedback from our shareholders, whether or not they sit on our board,” Agrawal said in his tweet about the news. “Elon is our largest shareholder and we will remain open to his input.”

No reason was given for the reversal. But Mr. Musk had tweeted erratically throughout the weekend, probing his followers with barbed questions about the future of the social media company.

In a post on Saturday, Mr. Musk asked“Is Twitter dying?”

In another, he suggested turning Twitter’s San Francisco headquarters into a homeless shelter because “nobody shows up anyway.” He also launched a flood of reviews of the company’s products, at one point suggesting that Twitter Remove ads completely service. (Most of Twitter’s revenue comes from ads.)

Under corporate governance principles, board members are required to act in the best fiduciary interest of a company and its shareholders, which Mr Agrawal emphasized in his tweet on Sunday evening. He also said Twitter’s board had been “clear about the risks” of Mr Musk’s decision to join as a director.

By not joining Twitter’s board, Mr. Musk will also no longer be bound by a previous agreement he signed with the company. As part of a “status quo” deal last week, he pledged not to buy more than 14.9% of Twitter shares and not take over the company. This suggests that Mr Musk could now continue to increase his stake in the company.

A Twitter spokesperson declined to comment beyond Mr. Agrawal’s post. In a tweet on Sunday evening, Mr. Musk did not directly address the situation with Twitter’s board, but posted an emoji of a hand over a face.

Mr Musk, the leader of electric car maker Tesla and rocket maker SpaceX, is famous for his mercurial. He often threw jabs on Twitter, stalked Tesla short sellers and insulting its detractors. In 2018, after he tweeted about taking Tesla private and falsely claimed he had secured financing for the deal, he was fined. $40 million by the Securities and Exchange Commission. Mr. Musk later said he disagreed with the SEC’s decision.

When Twitter revealed in a filing with the SEC on Monday that Mr. Musk had bought the stake in the company, the news was met with fanfare. As a prolific Twitter user, Mr. Musk’s investment appeared to be a vote of confidence in the company, sending its shares up more than 25% that day.

Mr. Musk’s purchases of Twitter shares also came at a delicate time for the company. Twitter is going through a transition since the company’s founder, Jack Dorsey, resigned as CEO Last year. Mr. Agrawal, the chief technology officer, was appointed in his place.

Twitter then announced on Tuesday that Mr. Musk would become a new director of Twitter with a term on the board due to begin on Saturday.

Mr. Agrawal and Mr. Dorsey both made public comments welcoming Mr. Musk to the board. Mr. Musk would “bring great value to our board,” Mr. Agrawal tweeted, adding that there had been conversations between the company and Mr. Musk in recent weeks.

“Parag and Elon both lead with their hearts, and they will be an amazing team,” Mr Dorsey wrote on Twitter.

The friendly remarks were underpinned by how the three men seemed to share similar ideas. At various times, everyone has talked about reshaping social networks by radically change the power to users and away from large companies. Such a move towards “decentralization” would give people more control over their social media feeds and theoretically allow for greater freedom of expression online. Mr. Musk, Mr. Dorsey and Mr. Agrawal have all been strong supporters of greater freedom of speech.

Mr. Musk also tweeted that he looked forward to making “meaningful improvements to Twitter in the months ahead!” He did not specify what those changes might be.

Then came the reversal of the weekend.

“I think it’s for the best,” Mr Agrawal said in his tweet on Sunday. He added that Twitter employees should “mute the noise and stay focused on the job and what we’re doing.”



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Newsrust - US Top News: Economic news of April 11, 2022
Economic news of April 11, 2022
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