Apr 12, 2022

Elon Musk Declines Twitter Board Seat

Now that the Tesla founder isn't on the board, he can buy as much stock as possible.

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Background: Over the past week, Elon Musk became the largest individual shareholder of Twitter. He bought the significant stake with the hopes of reforming Twitter and restoring free speech. The Tesla CEO was set to join Twitter’s board earlier last week.

The board seat: Part of the board seat agreement stipulated that Musk couldn’t accumulate more than 14.9% of the company. This would limit his long-term influence over Twitter.

Hostile takeover: Now that Musk isn't on the board, he can buy as much stock as possible. This opens up the opportunity for a hostile takeover—"when one entity tries to acquire a publicly-traded company without any consent or cooperation from the target's board of directors.”

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