At this point, you're probably well aware of the fact that Tesla and SpaceX CEO Elon Musk bought a huge stake in Twitter. This came after he was tweeting about the social media network, free speech, and the potential for creating his own platform. Now, Musk is going to be on the Twitter board, and while some people appear to be excited, others seem scared.
Some might say that fans of Tesla and Musk are likely to have positive thoughts on the CEO's Twitter ventures, while those who don't approve of the CEO may feel very differently, though it's not clear-cut. We've seen Tesla and Musk fans post on Twitter that they're uneasy about what the future of Twitter will hold with Musk on the board. At the same time, some folks who don't appear to be Tesla owners or fans are voicing their approval of potential changes that may lie ahead thanks to Musk's involvement.
To be clear, we have no idea what Musk plans to do regarding the future of Twitter. With that said, we aren't ready to form an opinion. Until some obvious changes to the social media platform appear, it honestly doesn't make much sense to "take sides." At this point, it's going to be a waiting game to see when and if anything major comes out of Musk's appointment to the Twitter board.
Musk's stake in Twitter was at 9.2 percent when the news first came out. The stake was worth some $3 billion at the time of Musk's share purchase. However, the stake is still considered "passive."
Musk doesn't "own" Twitter by any means. Moreover, he's just one of a group of board members, so while his opinion will be considered, he's not in charge. Nonetheless, Wedbush analyst Dan Ives shared on Yahoo! Finance that Musk will have an active role at Twitter in the near future. He also believes Musk will increase his stake. Ives said:
"This is just the appetizer. Ultimately, we believe he will have an active stake over the coming weeks or month. This is just a start. I think he will have a broader strategic focus on Twitter, whether it's changing the slate, changing the management team or ultimately a buyout. Just to be clear, this is just a start of what I believe is going to be a much more active role for Musk at Twitter.”
Ives' comment came ahead of more details about Musk's new role on the Twitter board. When Musk was asked to join the Twitter board, a rule was instated that he can't have a stake in Twitter that exceeds 14.9% while serving on the board. So, people who may be worried that Musk is going to "take over Twitter" or "buy Twitter outright" can probably relax a bit, at least for now. According to the agreement:
"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% of the Company’s common stock outstanding at such time, including for these purposes economic exposure through derivative securities, swaps, or hedging transactions."
Obviously, there's no stopping Musk from resigning from the board and buying Twitter, but it would be a monumental expense. In order to do so, he'd have to sell loads of Tesla stock. Not to mention, Musk is running many companies, and Tesla's plate is exceedingly full. Taking on Twitter as his own would be a tough task, and it would likely impact his other companies significantly.
It's also important to note that current Twitter CEO Parag Agrawal, as well as co-founder and former CEO Jack Dorsey have both officially endorsed Musk. The two are "really happy" and "excited" about Musk's future role on the Twitter board.
One can only hope that if Musk appeared to be coming on board with ill intentions, these two may feel differently. However, as we previously stated, we have no way of knowing what's in store for Twitter in the future. We do know that Musk has always had a tendency to ask "the people" what they want, though, while his list of followers is massive, they aren't an accurate representation of "the people."
We'd love to know your take on this. Are you excited or scared about Musk's new role on the Twitter board? What do you think he might try to do with his new powers? Start a conversation about this topic in our comment section below.