Anil Dash, CEO of software development startup Glitch, said activist shareholders, which we can assume Musk is in this case, often take their shares because one of three reasons. They waded back to split the company in a move that Dash said would make no sense for Twitter, appointing a captive executive (which Dash thought might be possible), or to receive dividends for the company. themselves. The second one won’t work, because Twitter hasn’t generated the money yet. “Musk isn’t aiming for any of that, so he’s just making sure he’s privileged on the platform, and then trying to get the fascists back like Trump,” Dash said.
Twitter spokesman Adrian Zamora said Twitter is committed to being fair in the development and enforcement of its policies and rules. “Our policy decisions are not decided by the board of directors or shareholders, and we do not plan to reverse any policy decisions,” said Zamora. “As always, our board plays an important advisory and feedback role throughout our service.” Zamora said daily operations and decisions are made by Twitter management and employees.
The percentage of shares Musk has purchased — just under 10 percent — may also hold a key. Anyone who owns more than 10 percent of any type of equity security are considered “insider” by the Securities and Exchange Commission (SEC) and subject to much stricter scrutiny. It’s a policy enforced by Section 16 of the Securities Exchange Act of 1934 and one that the SEC may look forward to investigating after previously slapping Musk on the wrist, accusing him of fraud. investors by tweeting that he had secured funding to take Tesla private in 2018 and solve a suit it was against him. The settlement also includes a requirement that Musk be approved for certain tweets related to his financial activities before posting.
However, other elements of Musk’s new deal with Twitter – including his sitting on the board – open him up to the possibility of a short-term trade. profit responsibility. The deal would prevent Musk from exiting any investments for six months without giving up potential profits (when Musk announced his purchase of Twitter stock, the price jumped from $39.30 per share to a high of 53 .84 USD). However, ‘s Twitter filed with the SECwhat confirms Musk will sit on the company’s board, also suggests he has a two-year director term, which will prevent him from pumping and dumping Twitter stock.
There’s an interesting twist to that filing: Musk couldn’t own more than 14.9% of Twitter stock while he was director of the board and for 90 days afterward — what Johnson called a “stalemate.” He calls it a professional move that helps keep the company safe from a takeover. “The incumbent leadership feels they are doing a great job, and they don’t want to be fired. They bought some protection against that at the cost of giving him a seat on the board,” Johnson said. In most cases, that won’t cost too much, but Musk isn’t like most people. “Elon Musk comes with his own headaches,” Johnson said. “I imagine they thought long and hard about that.”
