Elon Musk joins Twitter's board, pledges 'improvements'

Elon Musk will join Twitter's board of directors, the company said on Tuesday, a day after it was announced he had bought a majority stake in the social media website.

Twitter CEO Parag Agrawal said Musk — the CEO of electric carmaker Tesla— would "bring great value to our Board."

"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," Agrawal said.

Twitter's announcement follows Musk's move to buy 73.5 million of the company's shares for $2.9 billion (€2.65 billion), laying claim to a 9.2% stake in Twitter and becoming the platform's biggest shareholder.

What are the terms?

Musk bought the Twitter shares under the Elon Musk Revocable Trust, of which he is the sole trustee.

The platform's agreement with Musk states that the Tesla boss, as an individual or as a member of a group, cannot own more than 14.9 percent of Twitter's stock so long as he remains a board member — and for 90 days after leaving the board.

Those terms will expire at the company's 2024 annual shareholder meeting, according to a regulatory filing by Twitter.

Why is Musk interested in Twitter?

The move to restrict the number of stocks available to Musk is likely a strategic one. It blocks Musk — considered the world's richest man — from potentially becoming too influential in Twitter's decision-making.

There has been some tension between Musk and Twitter's leadership in the past. Musk, who has more than 80 million followers on the platform, frequently criticizes its policies and has recently questioned its commitment to free speech principles.

On Tuesday, Musk said he was going to make "significant improvements to Twitter in coming months."

Hours before the announcement that he would join Twitter's board, Musk asked his millions of followers if they "want an edit button?" Currently, it is not possible for users to alter their posts on Twitter after publication. They can only either delete them altogether or add a clarifying statement below.

Twitter landed Musk in trouble in the past

Musk, a frequent Twitter user, has generated controversies with his tweets in the past. At one point he disrupted the cryptocurrency market by posting a meme of himself and the Dogecoin logo.

In a March 2018 tweet, Musk said he had secured enough funds to privatize Tesla — when he had not.

The tweet boosted the company's stocks and therefore landed Musk in trouble with the US Securities and Exchange Commission (SEC), which said the announcement was misleading.

In a $20 million fraud settlement with the SEC, Musk agreed to step aside as Tesla chairman.

He also agreed to have his tweets approved by company lawyers, although his lawyers have now requested that a New York judge overturn the portion of the agreement concerning his tweets.

sl/dj (AP, Reuters)