Twitter Inc. said in a regulatory filing Tuesday that it entered into an agreement with Musk on Monday that will give the billionaire a seat on its board, with the term expiring at its 2024 annual shareholders meeting.
Musk, either alone or as a member of a group, won’t be allowed to own more than 14.9 per cent of Twitter’s outstanding stock for as long as he’s a board member and for 90 days after.
Twitter CEO Parag Agrawal said in a tweet that the company had been talking to Musk in recent weeks and “it became clear to us that he would bring great value to our Board.”
“He’s both a passionate believer and intense critic of the service which is exactly what we need on ?Twitter, and in the boardroom, to make us stronger in the long-term,” Agrawal continued.
Putting Musk on Twitter’s board and limiting the amount of stock he can acquire while as a director may be a strategic move on Twitter’s part, as Musk became its biggest shareholder and openly questioned the social media platform’s dedication to free speech and the First Amendment.
Musk, who has 80 million Twitter followers, purchased 73.5 million shares, worth about $3 billion. He has also raised the possibility with his massive and loyal Twitter following, that he could create a rival social media network.
Musk has not spoken specifically about any Twitter rule changes he might push. He tweeted Tuesday that he wants to make “significant improvements to Twitter in coming months!” Late Monday he launched a poll asking whether users want an edit button, misspelling “yes” as “yse.”
In March, Musk told his millions of followers on Twitter that he was “ giving serious thought ” to creating his own social media platform, and has clashed repeatedly with financial regulators about his use of Twitter.
Musk is locked into a bitter dispute with the SEC over his ability to post on Twitter. His lawyer has contended in court motions that the SEC is infringing on the Tesla CEO’s First Amendment rights.
Shares of Twitter rose more than six per cent before the market open.