Elon Musk won’t be joining Twitter’s board, after all. Now what?

And identical to that, it’s over earlier than it even started.

Elon Musk, the richest man on the planet and an avid poster of Twitter memes, has declined a proposal to affix the board of the social community. The announcement from Twitter Chief Govt Parag Agrawal put an abrupt finish to any hopes the world had of watching one of many platform’s greatest provocateurs develop into a part of its administration — but it surely additionally raised the prospect of a extra full Musk takeover.

“We introduced on Tuesday that Elon could be appointed to the board contingent on a background test and formal acceptance,” Agrawal said in an organization briefing he shared. “Elon’s appointment to the board was to develop into formally efficient 4/9, however Elon shared that very same morning that he’ll now not be becoming a member of the board.”

“Elon is our greatest shareholder and we’ll stay open to his enter,” Agrawal added. A spokesperson for Twitter declined to remark additional on the scenario. Musk doesn’t have a media consultant.

The deal so as to add Musk to the board happened after he acquired a 9% stake within the firm to develop into its greatest particular person shareholder. Filings with the U.S. Securities and Alternate Fee indicated that the seat got here with an settlement by Musk to maintain his stake beneath 15%.

It’s not clear what occurred within the interim to derail issues. Internally, workers could have bristled on the appointment of a enterprise magnate who has beforehand used his platform to name individuals pedophiles, pump fringe cryptocurrency initiatives, get in hassle with the SEC, elevate doubts about COVID-19 vaccines and mock social justice activism. A current sequence of tweets criticizing the corporate could have additionally referred to as into query how ready Musk was to subordinate his personal impulses and grievances to the pursuits of the corporate and its shareholders.

The trail ahead is equally unclear. Musk appears to nonetheless have his sizable stake within the firm, and hasn’t but made good on past intimations at launching his personal, competing social community. These are the eventualities that might unfold from right here:

Musk cashes out

Though there’s little indication that he plans to take action, one possibility for Musk could be to promote his stake in Twitter altogether and return to his outdated relationship with the corporate: as one in all its greatest, loudest customers, quite than a co-owner.

Getting concerned within the first place could have already heightened his long-running battle with the SEC after he was tardy submitting a required kind disclosing the acquisition of his stake. Strolling away now would save him additional complications, whereas additionally giving him extra time to deal with his personal firms, together with Tesla and SpaceX.

He’d additionally flip a revenue have been he in a position to money out shortly. Though the information that he isn’t becoming a member of the board did trigger a temporary drop within the worth of Twitter shares, they’re nonetheless effectively above their value earlier than his funding went public.

Musk doubles down

An up to date SEC kind that Musk filed Monday reaffirms that after he declined Twitter’s supply to affix the board, he “could, every now and then, purchase further shares of Frequent Inventory” within the firm, leaving the door open for him to exceed the 15% possession cap he would’ve confronted as a board member.

Have been he to go far sufficient in that route, or accomplice with different activist shareholders, Musk might exert his will over Twitter extra immediately, forcing modifications in management or coverage to align the platform extra along with his imaginative and prescient for it as a no-holds-barred free-speech zone.

That’s an consequence monetary analyst Dan Ives says might occur. “This now goes from a Cinderella story with Musk becoming a member of the Twitter board and conserving his stake beneath 14.9% to possible a ‘Recreation of Thrones’ battle within the months forward,” Ives, managing director of fairness analysis at Wedbush Securities, tweeted.

Musk hangs round and performs gadfly

Even with no board seat and no modifications to his stake within the firm, Musk will definitely hold having many, many opinions about what Twitter is and what it needs to be. Utilizing the appreciable energy afforded him as not only a main shareholder but in addition one of many platform’s hottest customers — he has greater than 81 million followers whose opinions he often solicits by in-app polls — Musk will stay a robust stakeholder within the firm.

Certainly, Musk’s new SEC submitting outlines his freedom to “have interaction in discussions with the board and/or [Twitter’s] administration group” in addition to “specific his views to … the general public by social media or different channels.”

Among the modifications he might push for are ideological. Particularly, Musk has signaled frustration with how the corporate handles free speech by way of its content material moderation insurance policies. “Provided that Twitter serves because the de facto public city sq., failing to stick to free-speech ideas essentially undermines democracy,” he tweeted final month. “What needs to be finished?”

Different concepts are extra evocative of the emotional funding any super-user feels within the product they’re obsessive about. Musk has labeled cryptocurrency spambots Twitter’s “single most annoying downside,” for example, and reignited the long-standing debate about whether or not the app ought to let customers edit tweets after posting them (the corporate has mentioned it’s engaged on such a function, albeit doing so impartial of Musk).

He has additionally mentioned the corporate ought to let customers of its premium “Twitter Blue” subscription get verified — a mark of legitimacy, connoted with a blue check-mark, that’s at present reserved for politicians, journalists and different public figures.

Musk could also be betting that he can higher push for these types of modifications from outdoors of the board than inside it.

“He’ll have as a lot affect as a shareholder as he would as a director on this circumstance, merely due to his important public presence,” mentioned Charles Elson, founding director of the Weinberg Middle for Company Governance. “At this level, it doesn’t matter whether or not he’s beneath the tent as a director, or outdoors the tent. He has important … title recognition, public consideration, and what he says about them can have affect.”

Final week, a Twitter spokesperson instructed The Instances that though the board “performs an vital advisory and suggestions position … each day operations and choices are made by Twitter administration and workers.”

Bloomberg’s Matt Levine, a longtime chronicler of Musk’s machinations, has additionally famous that had Musk joined the board, he would’ve been obliged to behave in shareholders’ finest pursuits, quite than simply pursuing his personal whims.

Now, Levine wrote Monday, “if Musk desires to alter how Twitter operates, he can get a gathering with Agrawal at any time when he desires, and ask for no matter he desires. If Agrawal says no, he can threaten to purchase extra inventory and take over the corporate.”