Tesla CEO Elon Musk now has a 9% stake in Twitter and a seat on its company board of administrators, elevating questions on how the billionaire enterprise magnate may reshape the social media platform. As Twitter's largest shareholder, he has the ear of high managers.
"Via conversations with Elon in latest weeks, it turned clear to us that he would deliver nice worth to our Board," Twitter CEO Parag Agrawal mentioned on Tuesday morning.
The "pleasant transfer" will probably "result in a bunch of strategic initiatives" each within the near- and long-term, mentioned Wedbush analyst Daniel Ives mentioned in an April 5 report.
One fast impression: Twitter's inventory has surged greater than 30% since Musk revealed he had taken a stake within the social media enterprise.
Does Musk have a historical past with Twitter?
Certainly he does. Musk's 80.5 million Twitter followers make him one of the fashionable figures on the platform, rivaling pop stars like Ariana Grande and Woman Gaga. However his prolific tweeting generally will get him into hassle when, as an example, he makes use of it to advertise his enterprise ventures, rally Tesla loyalists, query pandemic measures and choose fights with these with whom he disagrees.
In a single well-known instance, Musk apologized to a British cave explorer who alleged the Tesla CEO had branded him a pedophile by referring to him as "pedo man" in an offended — and subsequently deleted — tweet. The explorer filed a defamation go well with, though a Los Angeles jury later cleared Musk.
He is additionally been locked in a long-running dispute with the U.S. Securities and Alternate Fee over his Twitter exercise. Musk and Tesla in 2018 agreed to pay $40 million in civil fines and for Musk to have his tweets accepted by a company lawyer after he tweeted about having the cash to take Tesla personal at $420 per share — which did not occur however brought on Tesla's inventory value to leap. His lawyer has contended that the SEC is infringing on Musk's free speech rights.
What does Musk plan to do at Twitter?
Musk has described himself as a "free speech absolutist" and has made clear that he does not assume Twitter resides as much as free speech ideas — an opinion shared by followers of Donald Trump and several other right-wing political figures who've had their accounts suspended for violating Twitter content material guidelines.
However what's actually driving Musk's Twitter involvement is not clear. His preoccupations with the service embody arguing to make Twitter's algorithm viewable by the general public, widening the provision of "verified" Twitter accounts, and blasting a profile photograph initiative involving non-fungible tokens, or NFTs.
Musk has additionally known as "crypto spam bots," which search tweets for cryptocurrency associated key phrases then pose as buyer help to empty person crypto wallets, the "single most annoying drawback on twitter."
"We do not know what his objectives are," mentioned Jennifer Grygiel, a Syracuse College communications professor and an knowledgeable on social media. "Perhaps Elon Musk secretly needs to blow (Twitter) up ... perhaps he needs to destroy it."
In a tweet, Musk mentioned he was wanting ahead to creating "vital enhancements to Twitter in coming months!"
What can Musk truly do as a board member?
Musk's function as each a board member and Twitter's largest shareholder definitely provides him an outsized voice within the firm's future. He is been publicly praised this week by the CEO and different board members, an indication that Twitter management is more likely to take his concepts significantly.
However he is nonetheless only one member of a 12-person board that Twitter says has "an necessary advisory and suggestions function" however no accountability over day-to-day operations and choices. Meaning Musk will not have the authority to add an "edit button" or to revive Donald Trump's suspended account.
"Our coverage choices aren't decided by the board or shareholders, and we've got no plans to reverse any coverage choices," mentioned Twitter spokesperson Adrian Zamora.
Nonetheless, Musk is anticipated to push Twitter on problems with free speech. Twitter is amongst a number of social media platforms attempting to strike a steadiness between free expression and the censoring of content material deemed hateful, dangerous or false.
"[W]e imagine a main driver of this funding is Mr. Musk's want to reshape the platform and make it extra open-source with fewer middleman controls," analysts at Truist Securities mentioned in a analysis word.
What do shareholders assume?
A number of Wall Road analysts mentioned they had been inspired by Musk's new function at Twitter. "It is a man that does push for change, that does, I believe, refuse to have failure on his resume. An ideal man you want on the board of administrators for them," mentioned CFRA Analysis analyst Angelo Zino. That is true, Zino mentioned, even when "what precisely his concepts are, who the heck is aware of."
Different traders aren't so positive. Meredith Benton, founding father of the funding consulting agency Whistle Cease Capital, has been pushing for shareholders at each Twitter and Tesla to again stronger insurance policies affecting office harassment and discrimination. She describes Musk's new function as a regarding growth for Twitter traders, particularly given accusations by California regulators that Tesla has been discriminating towards Black workers at its San Francisco Bay Space manufacturing unit.
"Twitter's best present problem is to navigate efficiently by means of the societal implications of its platform's use," Benton mentioned. "Elon Musk together with his air of reckless bravado presents a danger of undermining considerate and strategic administration of those matters."
The place is Twitter as an organization?
There was government turnover since co-founder Jack Dorsey's departure in November left Twitter with Agrawal on the helm, as his preliminary actions have concerned reorganizing divisions. Wall Road analysts had accepted of the selection of Agrawal as the brand new chief, however there have been no main adjustments to the platform but. The corporate has lengthy lagged behind its social media rivals and boasts far fewer customers.
The mere reality of linking Musk's high-profile identify to Twitter may get individuals to spend extra time on on the platform and assist it earn more money, Zino mentioned, calling Musk "a very powerful particular person" at Twitter.
Musk is a busy man
You would not understand it from his prolific posts, however he does maintain a number of massive roles, together with CEO and "Technoking" of electrical automotive firm Tesla and CEO of the rocket firm SpaceX. He's additionally the founding father of The Boring Firm, an underground tunnel firm; and Neuralink, which needs to plant pc chips in individuals's brains.
Critics have raised considerations about medical analysis carried out on the College of California, Davis on dwell monkeys involving Neuralink, which Musk co-founded, CBS San Francisco reported.
Opponents of the analysis say the primates are subjected to abusive experiments that generally finish in demise. In February, lawsuit by a physicians group was filed towards the college demanding that paperwork concerning the analysis be launched, and a grievance has been filed with the federal authorities.
Nonetheless, Wedbush analyst Ives mentioned he believes "balancing his key roles at SpaceX and Tesla ought to NOT be a difficulty or main fear for traders at this pivotal time." Ives added, "Now it is time to get out the popcorn and watch the developments over the approaching months with Musk on the board."