Elon Musk joins Twitter board of directors after buying 9% stake in social media

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Twitter says it has no plans to reinstate former President Donald Trump‘s account despite Elon Musk vowing to ‘make significant improvements’ to the social media platform after becoming the company’s largest shareholder and a member of its board of directors.

‘Twitter is committed to impartiality in the development and enforcement of its policies and rules,’ the company told DailyMail.com on Tuesday. ‘Our policy decisions are not determined by the Board or shareholders, and we have no plans to reverse any policy decisions.’

‘As always our Board plays an important advisory and feedback role across the entirety of our service. Our day to day operations and decisions are made by Twitter management and employees,’ the company added. 

Republican lawmakers and social media users alike have called on the Tesla CEO, who has been highly critical of Twitter and its policies as of late, to restore Trump’s privileges after Musk disclosed Monday that he had purchased a 9.2 percent stake in the social media giant on March 14. 

On Tuesday, Twitter announced the tech tycoon was joining the company’s board of directors, causing the social media platform’s shares to rise over 7 percent in premarket trading and speculation he would try to address what he called the platform’s ‘failure to adhere to free speech principles’ and ‘fundamentally undermine democracy’.

Under the terms of the agreement, Musk will serve on Twitter’s board of directors until the company’s 2024 annual shareholders meeting. So long as he remains a director, the agreement says, Musk cannot own more than 14.9 percent of the company’s stock more for as long as he’s a board member and for 90 days after.

That means he could not take over the company until well after his term on the board is over.

But anger among conservative social media users first spilled over when Twitter and Facebook permanently suspended Trump’s accounts early last year following the January 6 attack on the U.S. Capitol. In response to his suspension, Trump launched his own platform, Truth Social, which seemingly mirrors the Twitter interface. 

Numerous Trump supporters and GOP lawmakers have urged Musk to get the ex-president back on the platform, now that he seemingly holds significant weight in the company.

‘Dear Elon Musk, bring back President Donald J. Trump,’ tax expert Julio Gonzalez tweeted Tuesday.

‘Musk joining the Twitter board is the first step in the right direction. Bring back Trump!’ echoed British broadcaster and former politician Nigel Farage.

They also accused the social media network’s woke leadership of ‘censorship’ including ‘shadow banning,’ which supposedly restricts a user’s reach without their knowledge or appearing to do so. 

‘Twitter used to be an open field of free thought,’ television host Pete Hegseth said Tuesday on Fox & Friends, according to Mediaite. ‘Now the blue checkmarks like groupthink leftists police that thought and the corporate types at Twitter have been happy to enforce it.’

He added: ‘They pushed off Donald Trump. They pushed off a lot of conservatives. If he were to open that up, it opens up the conversation in America.’ 

‘The Left has determined that speech is violence. That’s their argument on so many of these things. If [Musk] attempted to bring Donald Trump back, which he should, the target is gonna be even bigger on his back.’ 

Calls for Trump’s reinstatement first came on Monday after news broke of Musk’s shareholder status.

‘Now that [Elon Musk] is Twitter’s largest shareholder, it’s time to lift the political censorship. Oh… and BRING BACK TRUMP!’ outspoken pro-Trump Rep. Lauren Boebert (R-Colo.) tweeted on Monday.

Errol Webber, a Republican running for a California House seat, argued that Twitter should ‘give everyone who has been banned a second chance,’ including Trump.

‘@ElonMusk is now the largest shareholder of Twitter. Time to get this platform back to its former glory,’ Webber wrote. ‘Step one – bring back President Trump! Step two – give everyone who has been banned a second chance. Step three – end all forms of political and other censorship.’ 

Former Trump Treasury Department official Monica Crowley said: ‘He should demand the end of political censorship, company-wide reform, and the reinstatement of President Trump.’ 

Republican Study Committee Chair Rep. Jim Banks (R-Ind.) posted on Monday, ‘If [Elon Musk] can clean up Twitter and stop online censorship, I’m all for him taking over the whole damn thing.’ 

‘Will the new majority shareholder return freedom of speech to Twitter?’ questioned Rep. Marjorie Taylor Greene (R-Ga.). ‘It will require courage [because] the regime is heavily investing in a certain industry and threats will undoubtedly come. Yet the freedom of speech restored will enable us all to defeat them.’

‘Great job Elon Musk! Now reinstate President Trump!’ author Brigitte Gabriel applauded. 

‘Dems & liberal activists groups have spent years co-opting the censorship power of tech billionaires and expressing gratitude to Google and FB execs for censoring their enemies off the internet,’ journalist Glenn Greenwald tweeted. ‘Now they’re petrified a billionaire who won’t censor for them may take over Twitter.’ 

Musk, who has described himself as a political moderate, has butted heads with the Biden administration in the past and has not shied away from criticizing – and even mocking – President Joe Biden. 

White House Press Secretary Jen Psaki was asked during her Monday press briefing if the billionaire’s history with Biden would force the administration to recalibrate its digital strategy, which has so far relied heavily on Twitter. 

‘I expect we will continue to use Twitter, as you all will as well, I would expect,’ Psaki answered while declining to comment on Musk’s ownership specifically.  

Other members of the American public are criticizing the push for Trump’s return to the platform, alleging it would contribute to the spread of misinformation and violence.

‘If Trump loving Elon Musk’s track record is any indication of how he will impact Twitter, we can expect not only Trump back on Twitter but also some of the bigots that have been banned, people spreading deadly misinfo on Covid and worse,’ Sirius XM host Dean Obeidallah tweeted Tuesday.

‘If Elon Musk makes twitter a less ideologically homogenous place, that will do more to positively effect free speech on the internet than Trump ever did,’ echoed musician Philip Labonte. 

‘Why are conservatives asking Elon Musk to bring Trump back to Twitter? I thought they said they were leaving this site for Truth Social,’ user @SuperSaiyan95 mocked. 

‘With all the MAGAs celebrating the Elon Musk news today because they think he will use his clout to reinstate Trump’s twitter account, it suddenly occurred to me that, to them, it will now be Musk’s fault every day that he remains banned,’ attorney Ron Filipkowski wrote in a seemingly snarky manner. 

‘Fun that every Republican celebrating Elon Musk’s potential to bring Trump back to Twitter is basically saying that Trump’s Truth Social is absolute undeniable utter dog s**t,’ Ironbound Films CEO Jeremy Newberger added. 

‘I’m really wondering why the “Bring Back Trump” and “Make Twitter Great Again” are trending & why all of these #MAGA folks just don’t go to the Trump “Truth” app? Oh that’s right, that’s just another failure of his that’s gone belly-up,’ @wilg111 said.

While Musk has not indicated if he plans to bring Trump back to the Twitter-verse, it definitely isn’t out of the realm of possibility as the pair share history.

During his presidency, Trump enlisted Musk to serve of his manufacturing council, which included several tech executives including Intel CEO Brian Krzanich, Dell CEO and founder Michael Dell and Ford CEO Michael Fields.

The council also featured Dennis Muilenburg from Boeing, Wendell Weeks from Corning, Jeff Immelt from General Electric and Marillyn Hewson from Lockheed Martin, TechCrunch reported in 2017.

Musk was also a member of the Trump Administration’s Strategic and Policy Forum, which advised on economic matters. The Tesla CEO was incredibly public about his involvement with the administration, often writing optimistic tweets about the work officials were doing. 

Despite the apparent friendship and business relationship between the pair, usually-vocal Trump has not yet commented on the Twitter shakeup. 

The social media giant entered into an agreement with Musk on Monday that will give the billionaire a seat on its board, a Securities and Exchange Commission (SEC) report obtained by DailyMail.com revealed. 

The term of Musk’s board membership will expire at Twitter’s 2024 annual shareholders meeting. The billionaire, either alone or as a member of a group, won’t be allowed to own more than 14.9 percent of Twitter’s outstanding stock for as long as he’s a board member and for 90 days after.

After submitting the regulatory filing on Tuesday, Twitter CEO Parag Agrawal announced Musk’s board membership on the social media, alleging the billionaire brings ‘great value’ to the company.

‘I’m excited to share that we’re appointing @elonmusk to our board! Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board,’ Agrawal wrote.

‘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. Welcome Elon!’ 

Musk responded to the CEO, saying: ‘Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months!’   

News of Musk’s board seat comes amid allegations he broke SEC rules after missing the ownership-disclosure deadline for his stake in Twitter. 

Musk, who has 80 million Twitter followers, purchased 73.5 million shares of the platform on March 14, worth about $3billion. 

His shares represent a 9.2 percent passive stake in the company, according to the SEC 13G filing obtained by DailyMail.com. This type of filing is reserved for passive investors.

However, the SpaceX CEO has left himself open to penalties of up to $207,183 after he failed to disclose his ownership acquisition within 10 days of acquiring 5 percent of the company, as required by U.S. securities law.

Musk should have disclosed his shares by March 24 but didn’t sign the filing until 21 days after his purchase.

He also failed to include a certification indicating he didn’t acquire his stake in Twitter to change or influence control of the company, as is typically done when filing a 13G report, The Wall Street Journal reported.

Instead of including the certification in his form, Musk simply wrote: ‘Not applicable’.  

While the civil penalty is a financial slap on the wrist for Musk – the world’s richest person with a $302billion net worth, according to Forbes – the entrepreneur could also face charges of market manipulation after his filing triggered a surge in the company’s stock value of more than 27 percent.    

Twitter stocks have surged since mid-March when Musk purchased his stake. 

His shares, valued at around $2.4billion at the closing price of March 14, jumped to $3.7billion as of Monday’s closing price. 

As of 9am Tuesday, after it was announced he joined the board of directors, Twitter shares had climbed to $53.63, a 7.32 percent increase, CNBC reported. 

Based on the surge, DailyMail.com analysts estimate Musk has gained $2million since the announcement of the sale.

Experts allege investors are likely bidding shares higher on the chance that Musk’s stake and board membership could lead to something big within the company. 

The billionaire has been critical of Twitter and its policies of late, accusing the company of failing to adhere to free speech principles  – and been admonished for his own posts by regulators.  

He also made market-moving comments about the social media platform, after his purchase, without disclosing his stake.

On March 25, Musk tweeted a poll: ‘Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?’

A day later, Musk, a prolific user of Twitter himself, said that he was giving ‘serious thought’ to building a new social media platform.

Musk made these remarks after having acquired his large stake in the company, which he legally was required to reveal. 

‘This is not really a gray area. He acquired it and didn’t file within 10 days. It’s a violation. And so this is a slam dunk case from the SEC perspective,’ Adam C. Pritchard, a law professor at University of Michigan Law School, said. 

‘Arguably, his social media posts about potential alternatives to Twitter can be seen, in light of his previously undisclosed stake, as a form of market manipulation to affect the share price, but proving that seems difficult,’ echoed Howard Fischer, a former SEC council and a partner at law firm Moses & Singer. 

‘The fact that the revelation of his stake caused a price rise that resulted in Musk’s stake increasing in value is something that the SEC might look into.’  

Also on Monday, after revealing his stake in Twitter, Musk took to Twitter asking: ‘Do you want an edit button?,’ referencing a feature that many users have requested. 

Agrawal shared the post, writing: ‘The consequences of this poll will be important. Please vote carefully,’ seemingly referencing Musk’s previous tweet. 

In addition, some well-timed trades in Twitter options days before Musk revealed his purchase are raising eyebrows among options analysts.

‘The SEC certainly would look at if anyone who knew about the acquisition of these shares trading in advance of the filing. I really think that would be the focus rather than the tardiness,’ said Jacob Frenkel, a former SEC enforcement attorney and government investigations and securities enforcement practice chair for law firm Dickinson Wright.  

SEC disclosure punishments are historically modest, however the regulator could look into market manipulation allegations regarding the Twitter stock buy and seek harsher sanctions in an ongoing investigation regarding his Tesla stock sales.

The SEC said last month it has told Musk’s and Tesla’s counsel that staff are conducting an investigation relating to potential federal securities law violations. 

The federal regulator is also investigating Musk’s Nov. 6, 2021, tweet asking his followers whether he should sell 10 percent of his Tesla stake. 

The government agency reached a 2018 deal for Musk to get pre-approval on some of his tweets, following a Musk tweet that he had ‘funding secured’ to take Tesla private, which the SEC claimed defrauded investors.

Analysts allege the SEC could ‘tell a court that he’s a recidivist violator of the securities laws and that he needs to be dealt with harshly.’

‘Musk is taking real risks here,’ said Urska Velikonja, a law professor at Georgetown University Law Center. 

Musk was playing a game with the SEC officials, saying ‘Stop me if you can, but you can’t,’ she said, adding: ‘I do suspect the SEC is going to look long and hard into whether they can bring manipulation charges, along with the failure to file.’ 

Neither Tesla nor the SEC immediately responded to requests for comments.

Musk’s stake in Twitter means the Tesla co-founder has more than quadruple the shares of the platform’s founder, Jack Dorsey, who owns 2.25 percent.

The entrepreneur is a frequent user of Twitter although his posts have occasionally landed him in hot water. He joined the site in 2009 and has used the platform to make several announcements, including teasing a go-private deal for Tesla that landed him in regulatory scrutiny.

In 2018, the tech CEO was slammed after calling a British diver who helped rescue a group of Thai boys stuck in a cave a ‘pedo’. 

His Twitter posting has also led to accusations of stock manipulation, regularly sharing polls and information about his companies online. 

In August 2018, he wrote that he was ‘considering taking Tesla private at $420. Funding secured,’ a nod to Musk’s well-known interest in marijuana. 

The issue was, he didn’t actually have funding secured – but the stock price soared at the time, and it was later revealed that Musk apparently wrote the tweet because he ‘thought his girlfriend would “find it funny.”‘ 

He later tweeted how ‘high’ the stock had gone later in 2019 when it did, in fact, hit $420 a share.

Musk’s revelation about his stake in Twitter came two days after Tesla Inc. posted lackluster first-quarter production numbers. While the company delivered 310,000 vehicles in the period, the figure was slightly below expectations. 

Musk has been selling his stake in Tesla since November, when he said he would offload 10 per cent of his holding in the electric-car maker. He has already sold $16.4 billion worth of shares since then.

Twitter was the target of activist investor Elliott Management Corp in 2020, when the hedge fund argued its then-boss and co-founder, Jack Dorsey, was paying too little attention to Twitter while also running Square.  

Musk and Dorsey have had some common ground in terms of dismissing the so-called Web3, a vague term for a utopian version of the internet that is decentralized.

Musk is also the founder and CEO of SpaceX, and leads brain-chip startup Neuralink and infrastructure firm The Boring Company.

Dorsey resigned as Twitter CEO in November after 15 years at the helm. He remains remains the CEO of Square Inc, the hugely successful financial payments company that he co-founded in 2010, and is the sixth largest shareholder in Twitter.  

Meanwhile, Trump’s struggling social media venture hit more trouble on Monday when it emerged that two tech entrepreneurs had quit Truth Social and that the platform is only now advertising for an engineer to help build an Android app – depriving millions of Trump supporters from the chance to sign up.

Last week, download data revealed that Truth Social’s launch had fizzled quickly. And now Josh Adams and Billy Boozer have left their jobs as chiefs of technology and product development less than a year after joining.

Their departures – reported by Reuters – follow a difficult launch of the company’s iPhone app on Feb. 20. 

Weeks later, many users are still on a waiting list, unable to access the platform. 

Trump Media & Technology Group (TMTG) Chief Executive Devin Nunes, a former Republican congressman, said publicly that the company aimed to make the app fully operational within the United States by the end of March. 

Industry analysts estimate the app has been downloaded 1.2 million times in all – putting it well behind other apps that target conservative users such as Parler with 11.3 million and GETTR at 6.8 million installations. 

Its reliance on iPhone users and the absence of an Android app could be putting it at a particular disadvantage.

Android phones comprise about 40 percent of the U.S. market, but skews much higher among Trump supporters.

At the time of the last election, the Trump campaign found that almost two thirds of his base were using Android phones – in part because of distrust of Apple and in part because of the expense of iPhones. 

The shaky rollout has reportedly infuriated Trump himself, who sees the app as a chance to stand up for free speech and strike a blow against platforms that banned him last year.  

The former president was heard on the phone ‘swearing gratuitously’ and asking ‘what the f*** is going on’ with the app, according to the Daily Beast.

And things could be getting worse. The exit of two executives critical to the app-launch efforts could imperil the company’s progress as it tries to prove it can compete with mainstream platforms such as Twitter, two people familiar with the company told Reuters. 

‘If Josh has left, all bets are off,’ a source said of tech chief Adams, calling him the ‘brains’ behind the platform’s technology. 

Another source familiar with the venture said Boozer also had a major leadership role as product chief, running management across technology infrastructure, design and development teams.

Boozer declined to comment and Adams did not respond to a request. Representatives for TMTG and Trump did not respond to requests for comment. 

It is the latest bad news for Trump and his highest-profile business venture since leaving the White House.

Last week an industry analyst said Truth Social was installed only 60,000 per week during the past month.

‘This is down 93% from its launch week, when it saw 872,000 installs during the week of Feb. 21,’ an expert at Sensor Tower told TheWrap based on early data.