Twitter Inc. said it would appoint Tesla Inc. Chief Executive Elon Musk to its board, essentially bringing the billionaire social-media agitator inside the fold.
Mr. Musk on Monday disclosed a 9.2% stake in the company, making him its largest shareholder. He has been one of its louder critics, assailing the platform for its adherence to free speech. His frequent, colorful use of Twitter has also landed him in occasional legal trouble.
Twitter shares rose more than 8% to $54.16 in premarket trading on Tuesday. The stock soared over 27% on Monday, after Mr. Musk’s position in the company was disclosed. Twitter rose again after the board announcement, advancing more than 4% Tuesday.
Twitter Chief Executive Parag Agrawal said the company had been in conversations with Mr. Musk for several weeks.
“He’s both a passionate believer and intense critic of the service which is exactly what we need on @Twitter, and in the boardroom, to make us stronger in the long-term. Welcome Elon!” Mr. Agrawal tweeted.
Mr. Musk received a two-year term on the board. As long as he remains in that post, he cannot own more than 14.9% of the company’s stock, Twitter said in a securities filing.
Mr. Musk tweeted: “Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months!”
In 2021, billionaire CEO Elon Musk reached several milestones across Tesla, SpaceX and Starlink. WSJ reporters Rebecca Elliott and Micah Maidenberg break down some of his biggest moments in 2021 and what’s to come in 2022. Illustration: Tom Grillo
The outspoken entrepreneur hasn’t been shy about questioning Twitter’s values. After building his stake in the company, he mused publicly in recent weeks about Twitter’s commitment to free speech and even said he was considering starting a rival social-media platform of his own.
On March 25, 11 days after becoming the largest shareholder in the social-media company, Mr. Musk tweeted a poll, saying, “Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?” He added in a follow-up tweet: “The consequences of this poll will be important. Please vote carefully.”
More than 70% of the roughly two million people who responded voted no.
In landing a board seat, Mr. Musk will be in a position “to really kick up dirt,” said AB Bernstein analyst Mark Shmulik. “He moved from the back seat of the car to the front seat of the car. In fact he’s probably the driver.”
With Mr. Musk, Twitter will have 12 board members, including Mr. Agrawal and co-founder Jack Dorsey. In a tweet, Mr. Dorsey said that he welcomed Mr. Musk onto the board. “He cares deeply about our world and Twitter’s role in it,” Mr. Dorsey wrote.
The manner in which Mr. Musk disclosed his investment in Twitter could flare tensions between him and the U.S. Securities & Exchange Commission, securities lawyers say. He was late in disclosing his 9.2% holding in a form that investors are required to file when they buy more than 5% of a company’s stock, without planning to seek control. The filing also didn’t include a standard certification that underscores an investor’s passive status.
Last month, Mr. Musk said he would resign from the board of Endeavor Group Holdings Inc., effective June 30. Endeavor said in a March securities filing that the move wasn’t the result of any disagreement with the company.
Mr. Musk still remains on the board of at least two other companies, Tesla and rocket company Space Exploration Technologies Corp., as his SpaceX is formally known.