Elon Musk joins Twitter’s board of directors – what does that mean?

Looks like Elon Musk is up to more than some expected. And it seems that his position now – both as a shareholder AND board member – will facilitate his ability to change Twitter.

NEW YORK POST

“I’m excited to share that we’re appointing @elonmusk to our board!” Twitter CEO Parag Agrawal tweeted on Tuesday.

“Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board.”

Agrawal added: “He’s both a passionate believer and intense critic of the service which is exactly what we need on @Twitter, and in the boardroom, to make us stronger in the long-term. Welcome Elon!”

Musk responded to Agrawal: “Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months!”

On Monday it was announced that Musk bought 73.5 million shares of the company, which are worth an estimated $2.89 billion.

Due to Twitter’s share structure, Musk’s stake in the company will give him far more influence over the site’s operations than can be exerted by outside investors in tech giants like Meta or Google.

While Mark Zuckerberg holds special dual-class shares that effectively allow him to override Meta investors’ objections and do whatever he wants, Twitter only has one class of shares. That means Twitter shares held by founder Jack Dorsey give Dorsey the same voting power as shares held by Musk.

In a demonstration of the power that can be wielded by Twitter investors, Dorsey stepped down as Twitter’s CEO in 2021 following a heated activist campaign from shareholder Elliott Management. Elliott held around 4% of Twitter shares at the time — less than half of Musk’s current stake. 

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3 Responses to Elon Musk joins Twitter’s board of directors – what does that mean?

  1. resolute says:

    Out of curiosity here…..Am I correct that in order for Musk to buy $2.89 billion worth of shares in Twitter, somebody or somebodies had to sell him $2.89 billion worth of their Twitter shares? Any idea who that person or persons are?

    Liked by 1 person

    • stella says:

      The answer is that we don’t know – and Elon Musk probably doesn’t know either. Here’s some useful info about stock transactions from Motley Fool:

      https://www.fool.com/investing/2018/04/07/when-i-sell-stock-whos-buying-it.aspx

      Liked by 2 people

    • stella says:

      More:

      https://finance.zacks.com/buys-stocks-sell-2561.html

      Institutions account for the majority of trades, so chances are you will be selling your stock to a professional – a specialist or market maker, an institutional trader, a mutual fund, a pension fund or a hedge fund. These institutions often trade in large blocks, so your shares may be rounded up with those from other individual investors and sold en masse in a block trade.

      The New York Stock Exchange has specialists assigned to maintain an orderly market in specific stocks. NASDAQ market makers – institutional traders who specialize, or make market, in specific stocks – essentially do the same. These guys trade the same stocks day in and day out for tiny profits, making money on volume. They are often on both sides of a transaction – both buying and selling. They can buy your shares and resell them in a matter of seconds for a tiny markup.

      Liked by 1 person

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