Twitter appoints Elon Musk to board after he becomes largest single shareholder

Social media company confirmed it has been working on an editing feature since last year after the Tesla chief executive runs a poll asking followers if they would like it added to the site

Shares of Twitter soared after Elon Musk purchased approximately 73.5 million shares. AP
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Twitter has appointed Elon Musk to its board after the billionaire co-founder and chief executive of electric vehicle maker Tesla bought a 9.2 per cent passive stake in the social media company to become its single largest shareholder.

Mr Musk will “serve as a Class II director with a term expiring at the company’s 2024 annual meeting of stockholders,” Twitter said, in a Securities and Exchange Commission filing before markets opening on Tuesday in the US.

“For so long as Mr Musk is serving on the Board and for 90 days thereafter, Mr Musk will not, either alone or as a member of a group, become the beneficial owner of more than 14.9 per cent of the company’s common stock outstanding at such time, including for these purposes economic exposure through derivative securities, swaps, or hedging transactions,” the statement said.

Twitter chief executive Parag Agrawal said he was “excited” about Mr Musk's appointment.

“Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our board,” he said in a tweet. “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!”

Jack Dorsey, the founder of Twitter, said he was “really happy Elon is joining the Twitter board! He cares deeply about our world and Twitter’s role in it".

“Parag and Elon both lead with their hearts, and they will be an incredible team,” he said on Twitter.

Shares of Twitter jumped about 7 per cent in premarket trading to $53.38 on Tuesday. Twitter's stock price soared more than 27 per cent on Monday after Mr Musk bought about 73.5 million shares of the company, worth about $3 billion, according to an SEC filing.

“Overnight, Elon Musk stole the headlines, announcing with a swipe of his debit card, the purchase of a 9.2 per cent stake in Twitter,” said Jeffrey Halley, a senior market analyst at Oanda. “That was enough to light the fires in the tech space with the Nasdaq booking decent gains, with the Musk feel-good spreading to the US equity space in general.”

The Nasdaq jumped 1.90 per cent on Monday, while the S&P500 gained 0.80 per cent and the Dow Jones Industrial Average added 0.30 per cent.

Twitter had a market value of about $40bn as of the close of trading on Monday. Its shares are up about 17 per cent since the start of this year.

The company's shares settled at $49.97 at the end of trading on Monday. Shares of the company increased a further 1.1 per cent in after hours trading with the stock price rising to $50.52.

Mr Musk, who has more than 80 million followers on Twitter, has used the platform to make several announcements.

Last month, Bitcoin, Ether and Dogecoin received a brief boost after Mr Musk tweeted that he owned the digital tokens and was not planning to sell.

Mr Musk — the world's richest person with a net worth of $273bn, according to the Bloomberg Billionaires Index — has recently complained about excessive censorship of content and lack of free speech on Twitter.

“Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done,” Mr Musk said on Twitter last month.

In response to a poll he held, 70.4 per cent of users said Twitter does not stick to free speech principles, while 29.6 per cent supported the social media platform.

Mr Musk subsequently said he was “giving serious thought to this” when asked on Twitter whether he was considering building a new social media platform.

On Monday, Mr Musk started a new poll asking Twitter users if they wanted an edit button, a feature many users have asked for.

In a post on its platform, Twitter confirmed it has been working on the feature since last year.

In a tweet the social media company said "now that everyone is asking… yes, we’ve been working on an edit feature since last year! no, we didn’t get the idea from a poll 😉 we're kicking off testing within @TwitterBlue Labs in the coming months to learn what works, what doesn’t, and what’s possible".

Updated: May 17, 2023, 4:44 PM