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Elon Musk Set to Join Twitter Board of Directors
Potential issues with the SEC could arise from Musk’s investment.
In an unexpected move earlier this week, Elon Musk, the CEO of Tesla and SpaceX, announced that he had acquired a controlling interest in Twitter, his favored social networking platform. This development sparked discussions regarding his influence on the company’s strategic direction as a significant shareholder. However, it has been revealed that he will not merely remain a significant shareholder but will assume a role within the company.
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Twitter’s CEO, Parag Agrawal, recently revealed that Musk will be appointed to the board of directors at Twitter in the near future.
Parag Agrawal, the CEO, stated in a tweet, “After discussions with Elon in recent weeks, we concluded that his presence on our Board would be highly beneficial.”
“His diverse perspectives, as both a supporter and a critic of our platform, will be invaluable for Twitter’s growth and resilience in the long run,” Agrawal affirmed.
“Excited to collaborate with Parag & Twitter board to enhance Twitter significantly in the upcoming months!” Musk declared in response.
Elon Musk acquired Twitter shares during every trading session from Jan. 31 to April 1. The daily share purchases ranged from 371,075 to over 4.8 million, according to a recent filing. https://t.co/UOREQI8rfF
— MarketWatch (@MarketWatch) April 6, 2022
While this could be a momentous milestone for Musk, a complication arises: When he invested in the company, his filing indicated that he was a passive investor with no intention of directly influencing its corporate decisions. This discrepancy in his filing may prompt intense examination from the US Securities and authorities.
“[Musk] taking on a board nomination negates the idea of being a passive investor,” remarked Marc Steinberg, a former SEC enforcement lawyer, in a statement to Fox Business. “There is a general consensus that a board member can shape the policies and actions of the organization, which is incongruent with the role of a passive investor.”
