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Musk: Is Twitter running out?
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On Monday, Tesla CEO Elon Musk announced that it had spent $2.9 billion to acquire about 9.2 percent of Twitter, becoming the social media giant's largest shareholder.
After taking a stake in Twitter, Musk, the world's richest man, vowed to make "major improvements" to the platform, but a series of radical solutions he proposed caused controversy within Twitter, not only ordinary employees complained continuously, but the company's top management also openly and secretly counterattacked.
According to the US Consumer News and Business Channel (CNBC) reported on the 12th, Musk set off a "Twitter storm" at the end of last week: he issued a number of tweets in succession, "pointing out the country" on the current situation of the platform, and proposed a series of "improvement" plans. For example, he suggested that Twitter should allow users of paid services to pay using virtual currency, and their accounts should also receive corresponding "authentication marks" while being free from all advertising troubles.
Musk was sued by Twitter shareholders
According to Bloomberg, on April 12, local time, a Twitter shareholder filed a lawsuit against Musk, saying that the latter failed to disclose the transaction of buying Twitter shares in a timely manner as required, resulting in economic losses suffered by himself and other shareholders.
The Twitter shareholder, Marc Bain Rasella, filed a lawsuit in Manhattan, New York, saying Musk had bought a large number of Twitter shares since January, reaching the 5% disclosure threshold on March 14. U.S. securities law requires that if an investor buys 5% or more of a company, the information should be disclosed within 10 days of the transaction. This means that Musk should have announced his holdings on March 24 at the latest, but he did not announce them until April 4.
On April 4, Musk revealed that he had acquired a 9.2% stake in Twitter, becoming the largest shareholder of the social media platform, and Twitter closed up more than 27% on the day.
Image source: Ying Wei Cai
Rasella believes that Musk's delay in disclosing his shareholdings artificially depressed Twitter's stock price, allowing him to continue to buy Twitter stock at a low price until the final disclosure, while investors who sold Twitter shares suffered financial losses during this period. Rasella is actively looking for investors who will sell shares between March 24 and April 4, hoping to file a class-action lawsuit against Musk.
Adam Pritchard, a professor at the University of Michigan Law School, said: "This is not a so-called gray area. Musk bought a large stake without disclosing it within 10 days, which is a violation. So from the perspective of the U.S. Securities and Exchange Commission (SEC), this is an important event. ”
Musk has previously been punished by the US SEC for the letter issue, and has paid a fine of $20 million, and this incident may once again attract the attention of the SEC.
Musk: Is Twitter running out?
Over the weekend, Musk decided to forgo joining the board. But before the public announcement, he was quite busy on Twitter.
First, he asked twitter if Twitter should convert its San Francisco headquarters into a homeless shelter, "and no one goes to work anyway." His loyalists answered "yes" loudly, with 91 percent in favor of 912867 vote. A few hours later, Musk, 50, asked fans if they should delete "w from Twitter's name," giving them two options of "yes" or "of course."
Both tweets have since been removed, but it's clear that Musk is making fun of Twitter management after refusing to join the board. And now he can do it legally.
Wedbush tech analyst Dan Ives said the matter could trigger a "power game" between Musk and Twitter management as Musk could take a "more hostile stance" toward the company.
"Musk's failure to join Twitter's board could lead to a range of scenarios, including 1) joining forces with private equity partners to force Twitter to make major strategic changes and/or sells, 2) proposing various adjustments to create more noise and anxiety for Twitter's board/executives, and 3) Musk saying 'the game is over,' lowering his stakes and then going home." Ives wrote in a report on Monday. "In our opinion, 1 or 2 is more likely.
If Musk remains on Twitter's board, acting as a trustee is in the best interests of shareholders. That way he can't post premature ideas about the direction of the company on Twitter, some of which are like jokes or pranks. After all, (if he speaks as a director) an investor may sue him for improper performance of fiduciary duties.
On April 9, the same day Musk decided not to join the board, he did seem to be enjoying his freedom to the fullest. On the same day, he tweeted a simple question: "Is Twitter almost finished?" ”
Musk's Twitter layout
As a KOL with more than 80 million followers on the Twitter platform, Musk's influence cannot be ignored, and his number of followers ranks in the top five on Twitter, second only to Bill Gates, Obama and others.
Some platforms have concluded that the number of Tweets issued by Musk every year has basically increased year by year. At the same time, Musk's tweets have the widest influence on Tesla and SpaceX, and his words and deeds will attract the attention of more than 81 million fans.
But it is precisely because it is too influential that the US SEC has repeatedly filed lawsuits against Musk for publishing Tesla's business information on Twitter, and although Musk has relented, Twitter is still a channel for him to announce the latest developments of tesla and Space X.
Before filing a filing with the SEC announcing himself as Twitter's majority shareholder, Musk said on Twitter on March 25 that he was seriously considering building a new social media platform and questioned Twitter's current restrictions on free speech.
Judging from the disclosure of the documents submitted, Musk has bought Shares in Twitter before making these remarks, and even has been in a low-key layout for the first time.
According to regulatory documents, Musk began buying Twitter shares as early as January 31 this year, and the buying operation continued until April 1, with the purchase price range of $32.8 to $40.3, lower than twitter's current price of $47 per share.
After two consecutive purchases, Musk spent $2.64 billion to take control of 9.1 percent of Twitter, surpassing the 8.79 percent of investment banking firm Vanguard Group to become Twitter's largest shareholder.
It's worth noting that if Musk promises Twitter to become a board member, his stake before the 2024 shareholder meeting can't increase to 14.9%, but Musk ultimately refused to enter the board, meaning he can still continue to buy Twitter's shares without an upper limit.
After becoming Twitter's majority shareholder, will Musk influence Twitter's policy on free speech? Twitter said that even though Musk has become the largest shareholder, he will not have any privileges on Twitter.
However, as a significant shareholder, Twitter's management is very concerned about Musk's reform proposals for Twitter, such as Musk asked users "if you want an edit button", and Twitter's CEO replied that the voting results he initiated "will be important".
At present, whether Musk will use the identity of the majority shareholder to control Twitter operations is the focus of attention. According to his filings with the SEC, Musk did not explicitly state that holding the shares was not intended to change or influence control of Twitter, he only mentioned that holding Twitter shares was for investment purposes.
After Musk refused to become a member of the board, twitter CEO expressed respect for Musk's decision, and said that after many discussions about Musk joining the board, he believed that Musk, as a shareholder of the company, like other board members, must be premised on the interests of the company and shareholders.
Some industry insiders believe that with Musk's consistent style, he is unlikely to change the way he interacts with the public in the future, which means that his contradictions with the top management of Twitter will deepen, which is likely to lead to Twitter staging a "game of thrones". The New York Times said Musk is not a typical investor, and the industry has so far not understood his real motivation for acquiring Twitter shares. Some people in the investment community said that others buy shares to achieve asset appreciation, and musk, who is rich and willful, is likely to be just because of "fun".
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