Musk’s deal to join the board included an agreement to keep his share in the company under 15 percent
Agencies |
Last Updated at April 12, 2022 23:15 IST
Elon Musk’s rejection of a Twitter board seat frees him to boost his ownership stake in the social media platform and dodge obligations to promote its best interests, experts warned.
“This now goes from a Cinderella story with Musk joining the Twitter board and keeping his stake under 14.9 percent, helping move Twitter strategically forward, to likely a Game of Thrones battle between Musk and Twitter,” Wedbush analyst Dan Ives said in a note to investors.
Musk’s deal to join the board included an agreement to keep his share in the company under 15 percent.
But now, he can continue to amass stock and push for change without having to play nice with Twitter board members, said Techsponential analyst Avi Greengart.
“Everyone seems to think Musk wants a bigger part of the company than the board would let him have,” said Creative Strategies analyst Carolina Milanesi.
Musk confirmed on Monday he wouldn’t be joining the board, while offering no explicit explanation in an updated filing to US market authorities.
But he reserved the right to take a range of actions like sell his shares or buy more and engage Twitter’s board or management in discussions “without limitation” on topics ranging from structure and governance, to management or strategy, the filing said.
Possible scenarios now include Musk trying to force his will on Twitter, or even push to sell the company, said Ives.
Musk could also decide the game is over and shift focus to his many other endeavours, such as electric cars, space exploration and even linking human brains to computers, Ives added.
Critic or conqueror?
A tech world star with more than 81 million followers on the microblogging platform, Musk last week disclosed a purchase of 73.5 million shares — or 9.2 percent — of Twitter’s common stock.
Musk himself tweeted that he was “looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months!”
But having millions of Twitter followers doesn’t mean the serial entrepreneur knows best how to make money from the unique one-to-many messaging platform.
“There really is room for Twitter to grow its subscription revenue and advertising beyond what it is today, so perhaps Musk sees this as an investment,” Greengart said.
Twitter employees feel ‘chilling effect’ of Musk
Twitter employees were scheduled to have Monday off, for the firm’s monthly “day of rest.” But Elon Musk made it hard not to think about work.
Musk backed away from a plan to join the firm’s board over the weekend. For some employees, the reversal signalled chaos: Musk was going to keep tweeting his critiques of Twitter to more than 80 million followers on the site, without any requirement to act in the best interests of the company. The Q&A was cancelled.
The whiplash is overwhelming, employees said. The vibe among workers at Twitter is “super stressed,” with staff “working together to help each other get through the week,” some said.
“Musk’s immediate chilling effect was something that bothered me significantly,” Rumman Chowdhury, a director on Twitter’s AI research team tweeted. “Twitter has a beautiful culture of hilarious constructive criticism, and I saw that go silent because of his minions attacking employees,” Chowdhury said.
Matt Navarra, a social media consultant, said, “Twitter thought having Trump on the platform was tough. Elon Musk is going to be a corporate nightmare.” Bloomberg
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Musk’s deal to join the board included an agreement to keep his share in the company under 15 percent Topics Elon Musk | Twitter Agencies | Washington Last Updated at April 12, 2022 23:15 IST Elon Musk’s rejection of a Twitter board seat frees him to boost his ownership stake in the social media platform and dodge obligations to promote its best interests, experts warned. “This now goes from a Cinderella story with Musk joining the Twitter board and keeping his stake under 14.9 percent, helping move Twitter strategically forward, to likely a Game of Thrones battle between Musk and Twitter,” Wedbush analyst Dan Ives said in a note to investors. Musk’s deal to join the board included an agreement to keep his share in the company under 15 percent. But now, he can continue to amass stock and push for change without having to play nice with Twitter board members, said Techsponential analyst Avi Greengart. “Everyone seems to think Musk wants a bigger part of the company than the board would let him have,” said Creative Strategies analyst Carolina Milanesi. Musk confirmed on Monday he wouldn’t be joining the board, while offering no explicit explanation in an updated filing to US market authorities. But he reserved the right to take a range of actions like sell his shares or buy more and engage Twitter’s board or management in discussions “without limitation” on topics ranging from structure and governance, to management or strategy, the filing said. Possible scenarios now include Musk trying to force his will on Twitter, or even push to sell the company, said Ives. Musk could also decide the game is over and shift focus to his many other endeavours, such as electric cars, space exploration and even linking human brains to computers, Ives added. Critic or conqueror? A tech world star with more than 81 million followers on the microblogging platform, Musk last week disclosed a purchase of 73.5 million shares — or 9.2 percent — of Twitter’s common stock. Musk himself tweeted that he was “looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months!” But having millions of Twitter followers doesn’t mean the serial entrepreneur knows best how to make money from the unique one-to-many messaging platform. “There really is room for Twitter to grow its subscription revenue and advertising beyond what it is today, so perhaps Musk sees this as an investment,” Greengart said. Twitter employees feel ‘chilling effect’ of Musk Twitter employees were scheduled to have Monday off, for the firm’s monthly “day of rest.” But Elon Musk made it hard not to think about work. Musk backed away from a plan to join the firm’s board over the weekend. For some employees, the reversal signalled chaos: Musk was going to keep tweeting his critiques of Twitter to more than 80 million followers on the site, without any requirement to act in the best interests of the company. The Q&A was cancelled. The whiplash is overwhelming, employees said. The vibe among workers at Twitter is “super stressed,” with staff “working together to help each other get through the week,” some said. “Musk’s immediate chilling effect was something that bothered me significantly,” Rumman Chowdhury, a director on Twitter’s AI research team tweeted. “Twitter has a beautiful culture of hilarious constructive criticism, and I saw that go silent because of his minions attacking employees,” Chowdhury said. Matt Navarra, a social media consultant, said, “Twitter thought having Trump on the platform was tough. Elon Musk is going to be a corporate nightmare.” Bloomberg Dear Reader, Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance. We, however, have a request. As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed. Support quality journalism and subscribe to Business Standard. Digital Editor