Twitter Inc (NYSE: TWTR) just appointed Elon Musk to its board as a Class II director. Shares of the social media company are up more than 5.0% on Tuesday.
Musk can’t own more than 14.9% of Twitter
The news comes a day after Musk took a 9.20% stake in Twitter. The appointment restricts him from owning more than 14.9% of the microblogging platform for as long as he serves on the board and about three months thereafter.
His tenure will expire in 2024 at Twitter’s annual shareholder meeting. Welcoming Musk in a tweet, CEO Parag Agrawal wrote:
Through conversations with Elon in recent weeks, it became clear to us that he’d bring great value to our Board. He’s both a passionate believer and intense critic of the service, which is exactly what we need, to make us stronger in the long-term.
Jim Cramer reacts to the announcement
Musk is now the largest shareholder of Twitter Inc. Last week, he criticized the social networking service for standing in the way of free speech. Many, therefore, expect Musk to help Twitter unleash its true potential. Still, CNBC’s Jim Cramer sees complications ahead.
Can you imagine him being in the boardroom and not running the board? I know they’re welcoming him, but I think he is a Trojan Horse. There’s no way that the current board will entirely be in agreement with what Musk would want.
The chief executive of Tesla Inc has fuelled a close to 35% gain in Twitter’s stock price within 48 hours. TWTR is now up more than 20% for the year.
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