(Bloomberg) — In Silicon Valley, where board seats at public companies rarely trade hands, Twitter Inc. is the unruly exception. The social network has rotated through waves of directors in recent years as it dealt with slowing growth, executive turnover, contentious activist investors and unending political strife.
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Now the board has Elon Musk.
Over the last few months, the world’s wealthiest person went from being one of the loudest voices on Twitter to the company’s largest shareholder and board member. That transition has left employees and analysts guessing about Musk’s plans for the $37 billion company. It also puts a spotlight on Twitter’s mostly quiet board, which will now have to contend with the mercurial celebrity businessman.
“He’s launched rockets into space. And helped solve the world’s energy crisis,” said Matt Navarra, social media consultant and industry analyst. “He’s about to discover tackling content moderation on social media platforms is harder than both those things.”
Musk will be an unusual addition to the Twitter board. He isn’t an expert in advertising, which is how Twitter makes money, and he has a habit of tangling with regulators, who are a constant concern for any large social media platform. Jack Dorsey, Twitter’s former chief executive, is set to depart the board later this year when his term expires. Unlike Dorsey and Musk, the remaining 10 board members keep relatively low profiles. They don’t tweet nearly as often, and one hasn’t tweeted at all.
Shares of Twitter have jumped more than 17% since Musk disclosed his holdings, a sign that investors believe that he will have both the inclination and the influence to help the company hit its ambitious growth targets. 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 that follows Musk will be good for Twitter. “This acquisition doesn’t change what Twitter needs,” said Tom Forte, senior research analyst at D.A. Davidson. “It increases its stature and profile, but that hasn’t been where Twitter has come up short.”
The story of Twitter’s leadership up until this point is an eventful one. Dorsey, a Twitter co-founder, started his second stint as its CEO in 2015, when the board consisted of mostly Silicon Valley insiders, and only one woman. He pushed to diversify Twitter’s directors, and the following year the company replaced two early investors on its board with PepsiCo Inc. executive Hugh Johnston and Martha Lane Fox, a British internet entrepreneur. In a statement, a Twitter spokesperson said, “We’ve been open about the need to diversify our board, and that commitment still stands today.” The company has added two female members in the last two years.
In 2020, as Twitter’s stock price languished, activist investor Elliott Management targeted the company—and Dorsey in particular. Elliott pushed for Dorsey’s ouster, complaining that he was also running Square, another public company. In March of 2020, Elliott took a board seat at Twitter, as did private equity 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 to Parag Agarwal, Twitter’s chief technologist. At the same time, Salesforce.com Inc. executive Bret Taylor became the board chairman.
Despite all that upheaval, the board’s most chaotic era may be yet to come. Musk’s “appointment to Twitter’s board is very likely to bring controversy and theatrics,” Navarra said.
Musk, 50, has dropped some hints about his plans at Twitter. Since Jan. 31, when he quietly began acquiring Twitter shares, Musk criticized the company for “failing to adhere to free speech principles.” More recently, he promised that Twitter’s next board meeting “is gonna be lit.” He added an image showing him smoking marijuana on Joe Rogan’s podcast, an incident that prompted a Pentagon review. (Musk also runs Space Exploration Technologies Corp., a government contractor.)
Some analysts expect that Musk will play an active role in Twitter’s product development and policy moves—including, potentially, its decision to remove Donald Trump from the platform permanently in 2021. (Facebook and YouTube temporarily froze the former president’s account.) Musk “could try to convince the company to take it a little easier on content moderation,” said Ali Mogharabi, senior equity analyst at Morningstar Investment Service, who predicted that the billionaire would push to reactivate Trump’s account. However, it’s unclear how much power Musk could exert over that decision as a lone board member controlling about a 10th of the company.
Several Twitter employees said they were concerned about Musk’s positions on content moderation, as well as allegations of racism at a Tesla factory. The employees asked not to be identified discussing private company information. Another Twitter staffer called those upset about Musk’s appointment a “loud minority.” Most people at Twitter learned that Musk would get a board seat only minutes before the move was announced publicly, according to multiple people at the company. Musk will field questions directly from employees when he joins Agrawal at a company all-hands meeting next week.
From now on, staffers may get a more detailed look at decision-making at Twitter via Musk’s own feed. Boards frequently limit how much their members can speak about the company, and often “have codes of conduct and confidentially agreements,” said Karen Brenner, executive director of law and business initiatives at New York University’s business school. But those constraints likely won’t work for Musk, Brenner said. “He has shown that he believes he can speak as freely as he wants and flout whatever rules are in place.”
Whatever mysteries surround Musk’s plans for Twitter, they probably won’t stay mysterious for long.
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