Elon Musk, the CEO of Tesla, announced that he had canceled his plans to join the Twitter board of directors just as his term was about to begin.
Musk disclosed last week that he had taken a board seat at Twitter, despite claiming to be a passive investor in a regulatory filing he had filed the day before.
The reason for the reversal was not disclosed by Musk or Twitter. Even if he has no plans to do so at this time, Musk stated in a regulatory filing on Monday that he might now expand his 9.1 percent holding in Twitter or press the firm to seek mergers.
In afternoon trading in New York on Monday, Twitter shares were up 2.6 percent at $47.48. They’ve risen by more than 20% after Musk revealed his Twitter investment on April 4.
According to Wall Street experts, Musk’s engagement drew a large number of ordinary investors to the company.
Musk’s reversal, according to Jacob Frenkel, a former enforcement attorney at the US Securities and Exchange Commission (SEC), was unusual but did not appear to break any rules.
Musk’s compliance with his agreement with the SEC has also been questioned by securities professionals. Musk announced on Twitter in early November that if users approved, he would sell 10% of his Tesla stock.
The poll resulted in a majority of people saying yes, and Tesla stock plummeted as a result.
Tesla shares have since been sold for $16.4 billion by Musk.
Following Musk’s appointment to the board of directors last week, several Twitter employees were concerned about the company’s ability to filter material.
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