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Musk files SEC documents fueling more speculations

The drama involving Elon Musk and Twitter keeps getting intriguing, as some SEC filings may show the reasons the billionaire declined a seat on Twitter’s Board of directors.

When it came to light that Musk had purchased significant shares in Twitter, it caused lots of talk as people tried to predict what impact the billionaire CEO would have on the social media platform. However, more surprises came when Twitter CEO, Parag Agrawal, confirmed that Musk would not be joining the Board. Neither Agrawal nor Musk has publicly stated why Musk declined the offer.

The news of Musk’s decision sent Twitter shares on a dip. The stock had risen when Musk became a shareholder.

However, documents filed with the Security Exchange Commission have shed some light on what Musk could be thinking. The forms are mandatory for investors who plan to remain passive in a company’s operations. The SEC wants to know their intentions for buying up significant shares.

Twitter rules bar its board members from acquiring more than 14.9 percent of its shares. Musk is still at 9.2 percent with 73,115,038 shares. Apparently, he plans to acquire more.

Musk is the largest individual shareholder in Twitter but is not the biggest. The Vanguard Group, a mutual fund, reportedly revealed it owns 82,403,665 shares, or about 10.3 percent. However, every investor in The Vanguard Group owns a part of the shares.

On what the document says Musk might do, an old version of the report, filed on April 5, said;

“On April 4, 2022, the Reporting Person and the Issuer entered into a letter agreement (the “Agreement”) which provides that: (i) the Issuer will appoint the Reporting Person to the Issuer’s Board of Directors (the “Board”) to serve as a Class II director with a term expiring at the Issuer’s 2024 Annual Meeting of Stockholders; and (ii) for so long as the Reporting Person is serving on the Board and for 90 days thereafter, the Reporting Person will not, either alone or as a member of a group, become the beneficial owner of more than 14.9% of the Issuer’s common stock outstanding at such time, including for these purposes economic exposure through derivative securities, swaps, or hedging transactions.”

However, the updated version of the filing submitted on April 11 says;

“From time to time, the Reporting Person may engage in discussions with the Board and/or members of the Issuer’s management team concerning, including, without limitation, potential business combinations and strategic alternatives, the business, operations, capital structure, governance, management, strategy of the Issuer and other matters concerning the Issuer. The Reporting Person may express his views to the Board and/or members of the Issuer’s management team and/or the public through social media or other channels with respect to the Issuer’s business, products and service offerings.”

Apparently, being on the Board of directors may limit what Musk may say publicly about Twitter. He has learned this harsh lesson through run-ins with the SEC with his EV company, Tesla. However, what is clear is that Musk still wishes to make his opinions known to the Board, whether he is a member or not.

Meanwhile, Agrawal had noted in his letter announcing Musk’s decision that there would be lots of distractions in the future. Just what he meant by distraction or where it is coming from is unclear. However, he stated that the Board remains open to input from Musk.

It is also worth noting that Musk has not revealed exactly why he is not joining the Twitter board.

Written by HackerVibes

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