Twitter Investors Deal a Big and Humiliating Blow to Musk
Shareholders of Twitter ( (TWTR) – Get Twitter, Inc. Report) voted against re-electing Egon Durban, an ally to Elon Musk, as a director to the board at its annual shareholder meeting on May 25.
Durban, the co-head of private equity firm Silver Lake, had partnered with Musk when he sought to take Tesla ( (TSLA) – Get Tesla Inc Report), the electric carmaker, private as its CEO.
Twitter CEO Parag Agrawal declined to discuss the status of the takeover offer by Musk during its annual shareholder meeting.
He cited regulatory reasons for staying silent on the topic.
“We are working through the transaction process,” Agrawal said. “Our teams and I remain focused.”
Musk did not join the meeting and has not tweeted about it even though he is active in his comments.
The most recent moves by Musk, who is also CEO of SpaceX, could be a strategy to renegotiate the terms of the proposed $44 billion takeover offer by either seeking a lower price of $54.20 per share or back out of the deal completely.
Twitter’s board agreed to the takeover price and has said it remains committed to the deal.
The richest man in the world, Musk, who also is CEO of SpaceX, is now asking the Securities and Exchange Commission that regulates the stock market to investigate Twitter over the number of fake accounts on the platform.
The billionaire challenged Twitter’s board of directors and management since his acquisition offer to take the social media company private on April 14. By May 17, Musk said he wants the company to verify its data on the number of spam accounts and challenged Twitter’s board by saying that the takeover deal is no longer on the table.
“My offer was based on Twitter’s SEC filings being accurate. Yesterday, Twitter’s CEO publicly refused to show proof of <5%. This deal cannot move forward until he does,” Musk said.
Musk has launched a very public campaign to force the management and Twitter’s board in an attempt to renegotiate the acquisition price it had proposed. He believes he has achieved his goal and said a Twitter deal at a lower was not “out of the question.”
The billionaire made the comment at a virtual event hosted by investors Chamath Palihapitiya, Jason Calacanis, David Sacks and David Friedberg for their “All-In” podcast.
Twitter has lost $8 billion in valuation since the proposed take private offer and is now worth $27.32 billion as of May 24. The stock has dropped by 22% since the offer.
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The company’s closed at $35.03 on April 13 and the stock declined to $35.76 as of May 24.
Agrawal discussed political speech and said the social media company is working to improve Twitter, its policies and processes.
“We continue to increase transparency and choice for people,” he said. “We take responsibility for mistakes. We strive to learn from our mistakes and continue to evolve our approach.”
He reiterated that the company is working to earn more trust from users.
“We believe Twitter is a place for different voices and perspective to be heard,” Agrawal said.
Twitter aims to remain neutral on political discourse.
“Our rules are enforced objectively on content and accounts and our policies remain neutral to political identity and ideology,” he said.
Agrawal did not say whether more bans of users who promote conspiracies and false election information would continue, stating that it occurs only in rare instances.
Former President Donald Trump was banned from Twitter in the aftermath of the January 6 riot at the Capitol because he violated the company’s rules against violence incitement. The decision was made while Jack Dorsey served as CEO. Musk has said he would restore Trump’s account if his deal to acquire Twitter is successful.
“And it’s only in very rare instances that our policies lead to enforcement that takes content down or bans individuals more broadly improving the health of the public conversation on Twitter remains an essential focus area for us,” he said.
Twitter is focused on “limiting harm from misinformation on our service, through the policies we have around civic integrity, misinformation, manipulated media,” Agrawal said.
The company has begun enforcing a new policy around crisis misinformation, including the war in Ukraine.
“Our primary focus is on providing people more context and limiting reach of harmful content,” he said.
Twitter founder and former CEO Dorsey who also runs Block (SQ) – Get Block Inc Class A Report (formerly Square) saw his term as a board member end at the shareholder meeting on May 25.