Elon Musk joined the board of Twitter on Tuesday shortly after he became the company’s largest shareholder, with a 9.2% stake. While Twitter’s stock had its largest one-day rise ever, following news of Musk’s board appointment, the company has now introduced some risk and tension to the organization.
Musk is the only individual investor among Twitter’s top 10 shareholders, and while its founder Jack Dorsey is still a board member, he holds just a 2% stake in the company. Though Musk has been largely critical of the platform, Dorsey tweeted on Tuesday, “I’ve wanted Elon on the board for a long time.” In true Musk fashion, the eccentric billionaire said he’s looking forward to making “significant improvements to Twitter” in coming months, later tweeting a joke about him smoking at the next board meeting.
Dan Ives, a Wedbush Securities analyst, told MarketWatch that Twitter essentially had two options: be hostile or embrace Musk. “I think that is the smart strategy, rather than going after this in a hostile way that would not end well.”
Musk’s addition to Twitter’s board will certainly bring technology and engineering expertise, but it’s also likely to come with challenges for the social platform’s board directors and corporate leaders.
Eroding employee trust
Employees have expressed concern over Musk’s appointment to Twitter’s board, citing anti-transgender memes he’s shared on Twitter and his criticism of COVID-19 prevention measures as a threat to company culture. Some employees have also noted that Twitter’s board is more involved in the company’s day-to-day operations than at other tech companies, meaning Musk, a “free speech absolutist,” is likely to wield heavier influence than a typical board member.
Bad publicity
Twitter users, including some politicians ,are campaigning for Musk to reinstate former president Donald Trump on the platform. Though Twitter has denied any imminent changes on that front, Sam Abuelsamid, a Guidehouse Insights analyst who covers Musk’s leadership at Tesla, told Reuters, “I wouldn’t be surprised if Twitter restores Trump’s account now that Elon owns nearly 10% of the company.” Twitter said it permanently suspended Trump in January 2021 “due to the risk of further incitement of violence” following the events of January 6th.
Regulatory trouble
Musk’s tweets have repeatedly landed him in hot water, leading to SEC investigations and fines. The disclosure of his stake in Twitter may lead to further punitive action; he initially disclosed a passive stake before changing his status to an active investor, and did not file the disclosure within 10 days of making the stock purchase, per SEC rules.
“I can only imagine what Twitter will have to contend with,” Elliot Schreiber, a former communications executive at DuPont, Bayer, and Nortel Networks and professor at Florida Atlantic University, tells Modern Board. “The Tesla board has had difficulty controlling Musk and his comments have caused them some embarrassment. Now, he has a broader platform not only as a board member but more so as a large investor. It will be difficult to control him and have him think about what he says being a reflection on Twitter.”
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Aman Kidwai
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Headlines
Jobless claims drop. Jobless claims last week dropped to 166,000, its lowest since November 1968. More than 18 million Americans received unemployment benefits this time last year, due to pandemic-related layoffs and emergency benefits that have since ended. That total has now declined to 1.72 million. April's numbers indicate further tightening of the labor market: there are 5 million more employment openings than available workers, driving up wages and inflation. CNBC
Costly Russian exit. Shell exited joint ventures with a Russian state-owned energy company last month in response to its invasion of Ukraine. On Thursday, the oil and gas company said that the “reduced value of assets, credit losses and ‘onerous’ contract terms” will cut Q1 earnings by between $4 billion and $5 billion. Shell reported earnings of nearly $19.3 billion in 2021. CBS News
Driving up pay. Walmart is raising starting pay for truck drivers from an average of $87,500 to as much as $110,000. It’s also launching a 12-week program to train distribution and fulfillment center employees to become certified Walmart truckers. The company hopes the moves will address pandemic-related driver shortages as demand to move freight reaches record highs. USA Today
Night shift. Workers are increasingly putting in extra working hours at night, according to Microsoft data. That’s primarily a result of increased meetings during the day and the flexibility of remote or hybrid work. As a whole, these employees are also spending more time working than ever before. Researchers suggest implementing weekly meeting-free days, recording all meetings, and decreasing expectations for synchronous collaboration time. Atlantic
Buffet buys tech. After long avoiding tech stocks, Warren Buffet’s Berkshire Hathaway disclosed a $4.2 billion, 11% stake in HP Inc., the consumer division that split off from Hewlett-Packard Enterprise. HP shares rose 11% on the day as a result. Though Buffet typically avoids tech stocks, aside from a short ride with IBM and a 5.6% stake in Apple, his company now passes Vanguard and BlackRock to become HP’s top shareholder. Wall Street Journal
Board Movement
Clay Wilkes, Michel Combes and Carlos Medeiros are stepping down from SoFi’s board. Symetra Financial Corporation added Denise Leonhard, chief commercial officer at Venmo, and Sharon Brock, former co-CFO of Tokio Marine HCC, to its board. Walgreens CEO Roz Brewer has joined the board of VillageMD along with David Brailer, chairman of Health Evolution Partners. Morgan Stanley executive Carla Harris is joining the MetLife board. Amy Reinhard, vice president of studio operations at Netflix, is joining the board of Gannet. Yolanda Macias, chief content officer at Cinedigm Entertainment Group, is joining the Sketchers board. Luis Felipe Visoso, CFO of Unity Software, has joined Splunk's board.
Numbers That Matter
42%
As employees return to the office, attendance is at its highest since the start of the pandemic, but still less than half of pre-pandemic levels, according to Kastle Systems, a building security and access company. Among the 10 cities that make up this index, Austin (61%), Houston (54%), and Dallas (51%) had the highest occupancy. This is expected to continue trending upward going forward.
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