Less than forty-eight hours after disclosing his stake, Elon Musk already has plans for the micro-blogging website.
Elon Musk, CEO of Tesla (TSLA) – Get Tesla Inc Report, had promised that he would be a passive shareholder at Twitter (TWTR) – Get Twitter, Inc. Report. Unlike activist investors like the legendary Carl Icahn, he has pledged not to influence those who control the platform, but just hours later that pledge seems to be a thing of the past.
The billionaire, who became the group’s largest shareholder with a 9.2% stake, was invited to the board of directors at the same time. He will serve there until 2024. He is not entitled to own more than 14.9% of Twitter during that term or after 90 days after its expiration. Hot on the heels of this latest Twitter announcement on Tuesday, Musk immediately floated the idea of upcoming products.
“Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months!”, the tech tycoon wrote on Twitter, referring to Twitter CEO Parag Agrawal.
He did not give further details. But this post clearly suggests that Musk will not be a passive shareholder. Moreover, he had already given an idea of what type of investor he intends to be.
Indeed, on Monday evening Musk launched a poll on Twitter asking users if they were interested in an edit button.
“Do you want an edit button?” the billionaire asked.
Active vs Passive
Twitter users have until Tuesday to vote.
Interestingly, Parag Agrawal, the new CEO who replaced Jack Dorsey last November, retweeted Musk’s post with this message: “The consequences of this poll will be important. Please vote carefully.”
Interestingly, the topic on the edit button was Twitter’s April Fool’s to its users.
“We are working on an edit button,” the company posted on April 1.
Faced with questions on social media, Twitter has seen fit to clarify things. The platform claims to have been thinking about adding an edit button for several months now.
“yes, we’ve been working on an edit feature since last year! no, we didn’t get the idea from a poll 😉,” the company said, adding that it will start testing this option soon.
“we’re kicking off testing within @TwitterBlue Labs in the coming months to learn what works, what doesn’t, and what’s possible.”
Is this the Elon Musk effect? Does Twitter feel extra pressure with Musk as its largest shareholder?
Twitter is already under pressure to increase its revenues and the number of users and to unearth new products and even services to ensure medium-term growth.
“Musk joining the Twitter board (is) a key signal that Twitter is embracing Musk rather than a more hostile situation,” said Wedbush Securities analyst Dan Ives. “We would expect Musk to have an immediate impact upon joining the board and the Street will look for a range of strategic paths ahead for Twitter with Musk on board.”
The question is, are Musk’s promises outside of the passive investor framework? In other words, by promising significant improvements at Twitter, is Musk influencing the company when he has promised not to?
The SEC, with whom the billionaire has rocky relations, is no doubt monitoring the situation closely.
As we wrote in another story, there is another aspect of the mogul’s investment in Twitter that the regulator may not like. Musk indeed waited 21 days after acquiring the Twitter shares before disclosing them. However, the SEC’s financial disclosure rules require an investor using the type of form Musk used to announce his stake to make it public within 10 calendar days.
