Now that Elon Musk will not be joining the board of directors of Twitter, there will be more conjecture about his genuine goals, as well as, well, more paperwork. Musk has amended the mandatory filing (pdf) for investors purchasing a major stake in a publicly listed firm, which requires investors to explain their objectives.
The new form verifies that any agreement that prevented Musk from attempting to purchase a considerably greater stake of the business is no longer in place, and it sets out many options for him to make his voice known in the future. The outcome is proof for anybody who believes Musk’s turnaround was influenced by the legal duties of being on Twitter’s board of directors.
Musk filed a Schedule 13G form with the Securities and Exchange Commission (SEC) on April 4th (read here, pdf), which drew immediate criticism once his pending board seat was revealed, because the form is for investors who plan to remain passive in a company’s affairs — and taking a board seat isn’t exactly passive.
He clarified the situation with an amended Scheduled 13D filing (read here, pdf) that detailed his stock purchases and indicated an agreement not to try to buy more than 14.9 percent of Twitter’s stock. Still, the updated filings aren’t adequate to resolve the question of how long he waited to declare his stock transactions and the SEC’s response.
With 73,115,038 shares outstanding, Musk claims to possess 9.1% of the company. While he is Twitter’s largest individual shareholder, he does not own the majority of the company’s stock. According to Protocol, The Vanguard Group mutual fund said on Friday that it now controls 82,403,665 shares, or 10.29 percent of the corporation, despite the fact that ownership is split among all fund holders.
What’s changed now that the board of directors transaction is through, and the new document is here? Section 4, which formerly featured wording restricting Musk to a 14.9 percent share in the firm, is the sole noteworthy alteration. That phrase has been replaced with a notation explaining what the Reporting Person (Musk) “could” do, and it focuses on two items in particular.
“We will remain open to his feedback,” Twitter CEO Parag Agrawal wrote of Musk in a message to workers sent out Sunday night, and Elon’s letter implies there will be plenty of it. How much of it comes from board and management meetings versus social media musings may decide how much of the “distraction” Agrawal warned about really happens.
It’s unclear what prompted Musk to tell the board on Saturday morning that he would not be joining them as a member, but his future plans are also unknown. Musk writes in the form that he has no intentions to purchase further shares of the firm at this time (that’s covered in Item 4 of the new filing, as part of a series of prompts for the new shareholder), but that he “reserves the right to modify his plans at any moment, as he considers fit.”