Elon Musk is now Twitter’s largest shareholder with a roughly $3 billion stake and obtained a seat on the company’s board. There are many interesting aspects to this story, notably:
The filing. Initially, Musk filed with the SEC a 13G rather than a 13D. The 13G is expressly reserved for investors who intend to be passive and take no active role. The 13G was subsequently refiled as a 13D after Twitter announced Musk would be joining the board where he would clearly have influence — immediately. The company and Mr. Musk jointly put in place a super short standstill agreement prohibiting him from acquiring more than 14.9% of the company. As Matt Levine of Bloomberg Opinion points out “the Elon Musk Division” of the SEC might not be as accommodating and could take issue with the timing of Musk’s filings in regard to acquisition of Twitter’s stock.
Twactivism. For years, the company has withstood takeover rumors and heavyweight activist investors breathing down its neck. Because of Twitter’s outsized influence, multiple companies have weighed takeover bids. Elliott Management has been advocating for improvements in innovation and change in leadership since 2020. Last November, Elliott got its wish after Dorsey stepped down. Now the stock has shot up 22% since Mr. Musk’s disclosures.
The influence. Mr. Musk seems to be harnessing his more than 80 million Twitter followers to weigh in on what is basically a management issue: Whether to have an edit function. The next day, Twitter confirmed it was working on adding this feature – though the company says it has been in the works. Add his roughly 10% economic stake in Twitter, and Mr. Musk seems to wield unusual power at a company with influence way beyond its market capitalization.
Have a great weekend,
The GPP Team
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Bloomberg: Elon Musk Is Active Now
Activist investors are supposed to use the more detailed Schedule 13D. But Musk checked the passive investor box. Fun choice. Read More
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Wall Street Journal: Elon Musk to Join Twitter’s Board of Directors After Becoming Largest Shareholder
Twitter Inc. said it would appoint Tesla Inc. Chief Executive Elon Musk to its board, bringing the billionaire social-media agitator inside the fold. Read More
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Bloomberg: Elon Musk Adds New Twist to Twitter’s History of M&A and Activism
Twitter is, of course, no stranger to takeover chatter. This peaked in 2016, when potential buyers including Salesforce and Disney circled the company. Read More
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The New York Times: How Elon Musk’s ‘Soft Power’ Might Shape Twitter’s Future
“He can make recommendations at the board meetings, but what he really has is soft power,” the tech reporter Casey Newton tells Kara Swisher. Listen Here
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The New York Times: Starbucks’s New C.E.O. Scraps Stock Buybacks to ‘Invest More Profit Into Our People.’
On his first day back in the top job, Howard Schultz made an abrupt change in policy at the company as it faces rising worker discontent. Read More
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Axios: NYSE President: Demand for IPOs Hasn't Waned
Despite recent market volatility, demand for new public listings is still strong, New York Stock Exchange president Lynn Martin told me on stage at Axios' What's Next Summit Tuesday. Read More
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Bloomberg Law: Shareholders Up Climate, Social Demands After SEC Policy Shift
The SEC is quashing more company requests to exclude shareholder proposals related to climate and social issues from their proxies after a significant policy change in November. Read More
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Financial Times: US Executives Reap Record Pay as Historic Income Gap with Staff Widens
US CEOs are on track to reap rewards this year, raising the prospect of fresh clashes with investors and employees as the gap between their earning and their staff widens. Read More
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Harvard Law School Forum on Corporate Governance: Five Questions Boards Should Ask About the War in Ukraine
Russia’s invasion of Ukraine requires business leaders to remain in crisis-management mode. At this stage, the board should exercise oversight by asking probing questions to ensure the company is planning for multiple scenarios, reducing uncertainty, and adapting its business strategy. Read More
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Meeting in San Francisco, the Eighth Annual Berkeley Spring Forum on M&A and the Boardroom hosted by Ethan Klingsberg of Freshfields and Steven Davidoff Solomon of the University of California, Berkeley
is the preeminent West Coast gathering of regulators, investors, executives, practitioners, and academics. It will feature conversation on the M&A landscape, recent M&A caselaw and antitrust. The Forum is hosted by Berkeley Center for Law and Business and Gladstone Place Partners is an event sponsor.
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Hosted at the Marriott at the Brooklyn Bridge, this event will feature 400+ CEOs and senior-level executives from business, finance and Government, focused on building networks, collaboration and creating a blueprint for a commercially successfully transition.
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