Elon Musk Has Resigned From The Twitter Board Of Directors, According To CEO Parag Agrawal

Elon Musk Will Not Be Joining The Board Of Directors Of Twitter

This is the latest step by the world’s richest man to break corporate America’s rules: Elon Musk, CEO of Tesla Inc (TSLA.O), said on Monday that he had cancelled his plan to join Twitter Inc’s board of directors just before his term was set to begin.

In a regulatory filing the day before, Musk claimed to be a passive investor in Twitter. However, he later confessed that he had accepted a seat on the board.

Reuters reported at the time that Musk requested a seat on Twitter’s board of directors weeks before the social media company agreed.

There was no explanation for the reversal from Musk or Twitter. On Monday, Tesla CEO Elon Musk declared in a regulatory filing that while though he has no immediate plans to increase his 9.1 percent stake in Twitter or pressure the company to seek mergers, he might now.

Nobody at Twitter seemed bothered about the aggressive suggestion from Tesla CEO Elon Musk. Musk’s stake would be lowered if he tried to raise it over a certain level under a “poison pill” shareholder rights plan, but no mention of it was made on Twitter.

However, in a message on Sunday, Twitter CEO Parag Agrawal cautioned Twitter staff of “distractions ahead,” a likely reference to Musk’s criticism of the firm via Twitter. He went on to say that he thought Musk’s decision was “for the best.”

A request for comment was not returned by a Twitter spokeswoman.

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In afternoon trading in New York on Monday, Twitter shares were up 2.6 percent at $47.48. They’ve risen by more than 20% after Musk revealed his Twitter investment on April 4. According to Wall Street experts, Musk’s engagement drew a large number of ordinary investors to the company.

Investing experts have pointed out that Musk saved $143 million by buying Twitter stock at a reduced price by delaying and misrepresenting the announcement of his Twitter acquisition. When it comes to this, it’s not clear if Tesla CEO Elon Musk would even consider it.

Musk was unavailable for comment.

Many of Musk’s comments on the social media platform that he sent over the weekend were deleted on Monday. What triggered the move was unclear. The tweets varied from a plea for advertising to be removed from Twitter to the removal of the letter “w” from the company’s name.

Musk’s reversal, according to Jacob Frenkel, a former enforcement attorney at the US Securities and Exchange Commission (SEC), was unusual but did not appear to break any rules.

“Being made an opportunity to join the offer to board, considering it, and electing not to is not a breach of securities laws,” Frenkel explained.

The SEC’s spokeswoman declined to comment.

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Musk’s public criticism of Twitter, according to some experts, would have been difficult to reconcile with his fiduciary duties as a board director.

“Most people, including activist shareholders, don’t talk publicly after they’re on the board,” said Gregory Taxin, managing director of activist investor advice firm Spotlight Advisors.

‘FUNDING HAS BEEN SECURED’

Musk has made high-profile U-turns before. In 2018, he claimed that a $72-billion plan to take Tesla private had “financing secured,” but he never made an offer.

Musk resigned as Tesla’s chairman after the SEC accused him of defrauding investors. A lawyer examined some of Musk’s tweets, which he agreed to with the SEC.

Elon Musk Has Resigned From The Twitter Board Of Directors, According To CEO Parag Agrawal

Experts have questioned Musk’s compliance with his SEC agreement. Announcing the sale of 10% of Tesla stock, Musk tweeted in early November. The survey resulted in a drop in Tesla stock. Musk has since sold 16.4 billion shares of Tesla.

Last week’s news of Musk‘s board position sent some Twitter staff into a frenzy, according to Reuters.

As a board director for Twitter, Musk would have had little time due to his responsibilities at Tesla and SpaceX, according to Charles Elson, founding director of the Weinberg Center for Corporate Governance.

Involvement in this project takes time and attention away from Tesla’s principal venture, Elson says.

No comment from a Tesla spokesman.