Twitter employees were demoralized after Tesla CEO Elon Musk’s ownership of 9.2 percent of the company’s shares was disclosed on Monday. Following the announcement that he had joined Twitter’s board of directors on Tuesday morning, they engaged in a collective meltdown. What will they do when they hear that on Tuesday evening, Musk amended his SEC filing to reflect that his investment is no longer “passive” but “active”?
MarketWatch reported that after striking a deal to join the company’s board of directors, Musk replaced his existing 13G filing with a new 13D filing, which indicated that Musk’s interest in the company had changed from a passive one to a more activist one.
Musk had originally submitted a 13G form with the SEC indicating his interest in the company would be passive. TheStreet.com analyst Luc Olinga explains this “meant Musk is committed to not influencing those controlling the company — and that the tech tycoon wouldn’t do anything to take over Twitter.”
In the subsequent 13D filing, according to Olinga, “he and Twitter indicate that he will be an investor and shareholder who will weigh in on Twitter’s strategy. In a word, he will be an activist.”
The new filing also tells us that Musk began buying Twitter stock on Jan. 31.
Prior to the start of trading on Wednesday morning, Twitter’s market capitalization stood at $40.82 billion. Musk, with a current net worth of $281.5 billion, according to Forbes on Wednesday, is the richest person on the planet. He clearly has the means to increase his stake in Twitter.
To give you an idea of how significant Musk’s 9.2 percent investment actually is, CNBC reports that Twitter co-founder and former CEO Jack Dorsey’s stake is slightly above 2 percent.
As a board member, Musk’s ownership is capped at 14.9 percent, which would prevent him from taking over the company, according to CNBC.
However, it’s unclear if or how Musk’s amendment to his SEC filing will change that.
Even as things currently stand, the self-described free-speech absolutist now wields a great deal of power inside the company, and that has sent employees into meltdown mode.
Starlink has been told by some governments (not Ukraine) to block Russian news sources. We will not do so unless at gunpoint.
Sorry to be a free speech absolutist.
— Elon Musk (@elonmusk) March 5, 2022
In a 2018 interview with the MIT Technology Review, Twitter’s current CEO Parag Agrawal, who was then serving as a chief technology officer, said the company should “focus less on thinking about free speech, but thinking about how the times have changed.”
“Where our role is particularly emphasized is who can be heard … And so increasingly our role is moving towards how we recommend content … how we direct people’s attention,” he added.
Shortly after Agrawal took over as CEO, this quote was unearthed. Musk reacted at the time with the following tweet.
— Elon Musk (@elonmusk) December 1, 2021
Agrawal and other insiders are upset because the platform might to forced to allow information and opinions they disagree with to be published on their site. If those at the top lose their absolute authority to control the site’s content, they will no longer be able to control the news cycle or influence U.S. elections. No wonder they’re in a panic.
This is how one employee reacted to this prospect.
— Andy Ngô 🏳️🌈 (@MrAndyNgo) April 4, 2022
God knows we’re sorry, Ashna!