Elon Musk promises to bring even more drama to Twitter’s board of directors

Bloomberg — In Silicon Valley, where seats on the boards of publicly traded companies rarely change hands, Twitter Inc. (TWTR) is the more unruly exception. The social network has gone through waves of directors in recent years, as it grappled with slowing growth, executive turnover, controversial activist investors and endless political infighting.

Now the board of directors has Elon Musk.

In recent months, the world’s richest person has gone from being one of the loudest voices on Twitter to becoming the company’s largest shareholder and board member. That transition has left employees and analysts guessing at Musk’s plans for the $37 billion company. He also targets Twitter’s mostly silent board of directors, who will now have to take on the controversial businessman who is also a celebrity.

“He has launched rockets into space. And it has helped solve the global energy crisis,” said Matt Navarra, a social media consultant and industry analyst. “You’re about to find out that tackling content moderation on social media platforms is more difficult than those two things.”

Musk will be an unusual addition to Twitter’s board of directors. He’s not an expert on advertising, which is how Twitter makes money, and he has a habit of getting tangled up with regulators, which are a constant concern for any big social media platform. Jack Dorsey, the former CEO of Twitter, will leave the board at the end of this year, when his term expires. Unlike Dorsey and Musk, the remaining 10 council members keep a relatively low profile. They don’t tweet that often, and one hasn’t tweeted at all.

Twitter shares have risen more than 17% since Musk disclosed his involvement, a sign investors believe he will have both the inclination and the clout to help the company achieve its ambitious growth goals. Last year, under pressure from activist investor Elliott Management Corp., Twitter set a goal of reaching 315 million daily active users and doubling its revenue by the end of 2023.

But some analysts doubt that the kind of publicity following Musk is good for Twitter. “This acquisition doesn’t change what Twitter needs,” said Tom Forte, a senior research analyst at DA Davidson. “It increases your stature and profile, but that’s not where Twitter has fallen short.”

The history of the Twitter address up to this point is checkered. Twitter co-founder Dorsey began his second stint as CEO in 2015, when the board was made up of mostly Silicon Valley people, and only one woman. He pushed for a diversification of Twitter’s directors, and the following year the company replaced two of the earliest investors on its board with PepsiCo Inc. (PEP) executive Hugh Johnston and Martha Lane Fox, a British internet entrepreneur.

In a statement, a Twitter spokesperson said: “We have been outspoken about the need to diversify our council, and that commitment remains in place today.” The company has added two female members in the last two years.

In 2020, when Twitter’s share price was languishing, activist investor Elliott Management took aim at the company (and Dorsey in particular). Elliott pushed for Dorsey to be removed, complaining that he also ran Square, another public company. In March 2020, Elliott took a seat on Twitter’s board of directors, as did venture capital firm Silver Lake. Elliott was represented by Jesse Cohn (who left last year), and Silver Lake by Egon Durban. Dorsey appeared to have won a reprieve, but in 2021 he stepped down as CEO, handing the reins over to Parag Agarwal, Twitter’s chief technologist. At the same time, Salesforce.com Inc. (CRM) executive Bret Taylor became the chairman of the board.

Despite all that turmoil, the council’s most chaotic time may be yet to come. Musk’s “appointment to Twitter’s board of directors is very likely to bring controversy and theatrics,” Navarra said.

Musk, 50, has dropped some hints about his plans on Twitter. Since January 31, when he began quietly buying shares of Twitter, Musk criticized the company for “not adhering to the principles of free speech.” Most recently, he promised that Twitter’s next board meeting “is going to be on fire.” He added an image of him smoking marijuana to Joe Rogan’s podcast, an incident that prompted a Pentagon review. (Musk also runs Space Exploration Technologies Corp, a government contractor.)

Some analysts expect Musk to play an active role in Twitter’s product development and political moves, potentially including its decision to permanently remove Donald Trump from the platform in 2021. the company to take a little more slack on content moderation,” said Ali Mogharabi, senior equity analyst at Morningstar Investment Service, who predicted the billionaire would push to reactivate Trump’s account. However, it’s unclear how much power Musk could wield over that decision as a lone member of the board of directors who controls about a tenth of the company.

Various Twitter employees They said they were concerned about Musk’s positions on content moderation, as well as allegations of racism at a Tesla factory. (TSLA). The employees asked not to be identified when discussing private company information. Another Twitter employee called those upset by Musk’s appointment a “loud minority.” Most people on Twitter learned that Musk would be getting a board seat just minutes before the move was publicly announced, according to multiple people at the company. Musk will answer employee questions directly when he joins Agrawal at a meeting of all company employees next week.

From now on, employees will be able to have a more detailed view of decision-making on Twitter through Musk himself. Boards of directors often limit their members’ disclosures about the company and often “have codes of conduct and confidentiality agreements,” says Karen Brenner, executive director of business and legal initiatives at the University of Chicago business school. New York. But those limitations probably won’t work for Musk, Brenner said. “He has shown that he believes that he can speak as freely as he wants and flout whatever rule is in place.”

Whatever mysteries surround Musk’s plans for Twitter, they probably won’t remain mysterious for long.

This article was translated by Estefanía Salinas Concha

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