Elon Musk may acquire additional shares in Twitter now that he is no longer accepting a position on the social media company’s board, according to a securities filing on Monday.
The abrupt reversal over the board seat over the weekend ignited renewed speculation about Musk’s intentions for Twitter since the Tesla chief executive officer first disclosed he had taken a stake of just over 9 per cent — becoming the company’s largest individual shareholder. By not joining the board, Musk is no longer subject to an agreement to keep his stake below 14.9 per cent. Twitter shares were up 1.7 per cent in late Monday trade on Wall Street.
According to a filing with the Securities and Exchange Commission, Musk has no “present plans or intentions” to acquire additional shares, but “reserves the right to change his plans at any time” after evaluating various factors including the stock price and the “relative attractiveness of alternative business and investment opportunities.”
Any significant changes in Musk’s investment — equal to 1 per cent or more — would have to be disclosed to regulators. If Musk wishes to make a full takeover offer, he can make a hostile bid for the company, and take his offer directly to shareholders. Twitter’s rising share price since Musk first revealed his position in early April makes any further stake-building increasingly expensive.
However, Musk can afford it. He’s currently worth about $US260 billion ($350 billion) according to the Bloomberg Billionaire’s Index, compared with Twitter’s market valuation of about $US37 billion.
The SEC notice also said that Musk could engage in discussions with the board about potential business combinations and strategic alternatives. And, in a twist that may be germane to one of Twitter’s most prolific users, the filing noted that Musk can express his views to the board “or the public through social media or other channels.”
Musk has gone from “helping move Twitter strategically forward to likely a ‘Game of Thrones’ battle between Musk and Twitter,” said Dan Ives, an analyst at Wedbush Securities, “with the high likelihood that Elon takes a more hostile stance towards Twitter and further builds his active stake in the company.”
The sudden about-face came despite Musk having held “many discussions” with Twitter’s directors. But the entrepreneur ultimately declined their offer of a board seat, chief executive officer Parag Agrawal tweeted on Sunday.