Elon Musk, the world’s richest man and Twitter’s largest shareholder, will no longer join the social network’s board of directors, the company said late Sunday.
The move rounded off a tumultuous week on Twitter launched by Mr. Musk (50). On Tuesday, Twitter announced that the billionaire would be appointed to his 11-member board for a term expiring in 2024. The invitation to join was followed by the committee that Mr. Musk raised a 9.2 percent stake in the company, making it its largest shareholder.
But Parag Agrawal, Twitter’s chief executive, tweeted late Sunday that the situation had changed. On Saturday morning, Mr. Musk – who is a big Twitter user with more than 81 million followers – told the company he would no longer become a board member, Mr Agrawal said.
“We have and will always appreciate the contribution of our shareholders, whether they are on our board or not,” Mr. Agrawal said in his news tweet. “Elon is our largest shareholder and we will remain open to his contribution.”
No reason was given for the reversal. But Mr. Musk tweeted irregularly over the weekend, asking his followers with prickly questions about the future of the social media company.
In one post on Saturday, Mr. Musk asked“Is Twitter dying?”
In another, he suggested that Twitter’s headquarters in San Francisco be turned into a shelter for the homeless because “no one shows up anyway.” He also dismissed criticism of the company’s products, at one point suggesting that Twitter remove ads from service completely. (Most Twitter revenue comes from ads.)
According to the principles of corporate governance, board members must act in the best fiduciary interest of the company and its shareholders, as Mr. Agrawal pointed out in his tweet on Sunday night. He also said that the Twitter board was “clear about the risks” when Mr. Musk decided to join as director.
By not joining the Twitter board, Mr. Musk will no longer be bound by the previous contract he signed with the company. Under a standstill deal last week, he pledged not to buy more than 14.9 percent of Twitter’s shares and not to take over the company. This suggests that Mr. Musk could now continue to increase his stake in the company.
A Twitter spokesman declined to comment other than Mr Agrawal’s announcement. In a tweet on Sunday night, Mr. Musk did not directly refer to the situation on the Twitter board, but placed an emoticon of his hand over his face.
Mr. Musk, the leader of electric car maker Tesla and rocket maker SpaceX, is gloriously lively. He often rejected criticism on Twitter, trolling the Tesla salesmen and insulting his critics. In 2018, after he tweeted about privatizing Tesla and incorrectly claimed that he had secured funds for the transaction, the Securities and Exchange Commission fined him $ 40 million. Mr Musk later said he disagreed with the SEC’s decision.
When Twitter revealed in an SEC submission on Monday that Mr. Musk bought a stake in the company, the news was greeted with pomp. As a prolific Twitter user, Mr. Musk’s investment seemed to be a vote of confidence in the company, causing its shares to rise more than 25 percent that day.
Mr. Musk bought shares of Twitter at a delicate time for the company. Twitter has been going through a transition since Jack Dorsey, the company’s founder, stepped down as CEO last year. Mr. Agrawal, Chief Technology Officer, has been appointed in his place.
Twitter then announced on Tuesday that Mr. Musk will become the new Twitter director with a board term due to begin on Saturday.
Mr. Agrawal and Mr. Dorsey made public comments welcoming Mr. The man on the board. Mr. Musk would “bring great value to our committee,” tweeted Mr. Agrawal, adding that there have been talks between the company and Mr Musk in recent weeks.
“Parag and Elon lead by heart and will be an amazing team,” Mr. Dorsey wrote on Twitter.
Friendly remarks were corroborated by the fact that all three men seemed to share similar ideas. At different times, each spoke of reshaping social networks by radically shifting power to users away from large companies. Such a shift towards “decentralization” would give people more control over their content on social media and theoretically allow more freedom of speech on the internet. Mr. Musk, Mr. Dorsey and Mr. Agrawal were all outspoken advocates of more freedom of speech.
Mr Musk also tweeted that he was looking forward to “significant improvements on Twitter in the coming months!” He did not specify what the changes could be.
Then came the turning point over the weekend.
“I believe this is the best,” Mr Agrawal said in his tweet on Sunday. He added that Twitter employees should “turn off the noise and stay focused on the work and what we do.”