SUZANNE CORDEIRO/AFP via Getty Images
- Last week, Elon Musk revealed a 9.2% stake in Twitter, becoming the company's largest shareholder.
- On Tuesday, Twitter's board offered Musk a seat, so long as he owned no more than 14.9% of shares.
- After a week of speculation, Twitter CEO Parag Agrawal announced that Musk declined the invitation.
When the news broke last week that one of Twitter's power users, Elon Musk, had become the company's largest single shareholder with a 9.2% stake, expectations for his increased involvement in shaping the platform shot up like a SpaceX Falcon rocket.
New features, policies, and strategies were energetically speculated upon before — like the Falcon — gently returning back to earth on Sunday, when Musk declined an invitation to join Twitter's board.
It was a chaotic seven days of reactions and predictions.
Here's how it went down.
A bit of backstory
The saga begins in January when records show Musk began purchasing shares of Twitter on an almost daily basis.
By March 14, he reached a 5% stake, representing a threshold that the US Securities Exchange Commission deems large enough to require public disclosure.
But instead of revealing his stake by March 25 as required, Musk said nothing and continued quietly amassing shares at what experts told the Washington Post were artificially low prices.
The following week, Musk implied that Twitter was undermining democracy by "failing to adhere to free speech principles."
"Is a new platform needed?" he asked on March 26.
Later that day, he said, "Am giving serious thought to this." He would go on to buy millions more shares of Twitter stock.
Monday, April 4
Last Monday, Musk revealed his ownership of 73,486,938 shares, worth 9.2% of Twitter, in a 13G filing with the SEC. The market and social media reactions were immediate.
The stock price surged more than 25% on the news as investors began pricing for a potential sale of the company.
"Some investors are certainly hoping for a sale, but we believe the stock move is likely an overreaction for this broadly speculative possibility," Bernstein analysts led by Mark Shmulik said in a note.
That same day, supporters of Donald Trump called for Musk to reinstate the former president who had been banned from the platform over "the risk of further incitement of violence."
That evening, Musk tweeted a poll asking his followers if they "want an edit button."
Tuesday, April 5
The next day, Twitter notified the SEC of its intent to appoint Musk to its board of directors "as promptly as practicable," following a background check and other onboarding procedures.
Central to the agreement was a stipulation that Musk not become the beneficial owner of more than 14.9% of the company's shares.
"Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board," Twitter CEO Parag Agrawal said in a tweet.
The stock shot up another 10% following the announcement, and Musk tweeted that he was looking forward making "significant improvements" to the service.
Twitter's founder, Jack Dorsey, even weighed in, saying he was "really happy" that Musk was joining Twitter's board.
A 13D (distinct from 13G) financial filing on Tuesday revealed that Musk had been on a Twitter buying spree nearly every day since early January.
Wednesday, April 6
On Wednesday, the Washington Post estimated, based on calculations, that Musk netted savings of $156 million by skipping the deadline to disclose his 5% stake back in March. By keeping his ownership quiet, Musk was able to buy shares at a 30% discount, finance experts said.
"I really don't know what's going through his mind. Was he ignorant or knowledgeable that he was violating securities law?" David Kass, a finance professor at University of Maryland's business school, told the Post.
Thursday, April 7
Employee reactions continued to gather steam, with with one staffer calling Musk "a racist," and others expressing concerns over potential interference in the company's content moderation.
"Quick question: If an employee tweeted some of the things Elon tweets, they'd likely be the subject" of an investigation from HR, one employee wrote in a Slack message that was viewed by the Washington Post. "Are board members held to the same standard?"
Saturday, April 9
On the day he was set to begin serving as a board member, Musk spent a fair amount time rattling off a list of changes he would like to see on the platform, including dogecoin payments, price cuts, and authentication checkmarks for its Blue subscription service.
Sunday, April 10
On Sunday, he tweeted — then deleted — a suggestion that Twitter's San Francisco headquarters be converted to a homeless shelter since "no one shows up anyway" at the office.
Hours later he posted a poll asking whether the company should "delete the w in twitter." The only possible answers to the poll were "Yes" or "Of course." This too was later deleted.
Late on Sunday evening, Agrawal tweeted a note saying that "Elon has decided not to join our board," and explained that Musk had shared his decision the day before.
"I believe this is for the best," Agrawal added. "Elon is our biggest shareholder and we will remain open to his input."
Monday, April 11
Early Monday, Musk "liked" a tweet that claimed he was told to "not speak freely" as a condition of board membership.
Later, Rumman Chowdhury, Twitter's director of ML Ethics, Transparency, and Accountability, expressed relief at the decision, tweeting that Musk had "immediate chilling effect" on the company culture.
"My rule #1 is 'do not feed the trolls,'" she added. "People like him thrive on attention, including negative attention. I wasn't going to give him the satisfaction."
The story likely isn't over yet
Unconstrained by an agreement that he own less than 14.9% of the company, Musk's buying spree could be ramping up, Wedbush analyst Dan Ives told Insider's Isobel Asher Hamilton.
"This now goes from a Cinderella story with Musk joining the Twitter board and keeping his stake under 14.9%, helping move Twitter strategically forward, to likely a 'Game of Thrones' battle between Musk and Twitter," Ives said.
source https://www.businessinsider.com/elon-musk-twitter-timeline-stock-purchase-board-seat-drama-2022-4