Since it burst onto the scene in 2006, Twitter has been home to flourishing social and political commentary, shared news, scandal gossip, cat memes and dress color arguments.
Twitter has devoted a substantial amount of effort to stanching the latter while preserving the former — though not always in ways that satisfy most users.
The social media platform has angered followers of Trump and other right-wing political figures who’ve had their accounts suspended for violating its content standards on violence, hate or harmful misinformation.
While Twitter’s user base remains much smaller than those of rivals such as Facebook and TikTok, the service is popular with celebrities, world leaders, journalists and intellectuals.
It likely will negotiate, seeking a higher price per share, or it may want provisions to ensure that the board remains independent of Musk, said John Coffee, a professor at Columbia University’s law school and head of its corporate governance center.
The board could adopt “poison pill” provisions to offer more shares and dilute the value of Musk’s holdings, if Musk’s stake grows to 10% or 15%, Coffee said.
Most of Musk’s fortune, estimated by Forbes to be nearly $265 billion, is tied up in shares of Tesla.
Just over 51% of his stake already is pledged as collateral, according to a Tesla proxy statement.
A lawsuit filed Tuesday in New York federal court alleged Musk illegally delayed disclosing his stake in the social media company so he could buy more shares at lower prices.
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Jacob Frenkel, a former SEC enforcement attorney now with the Dickinson Wright law firm in Washington, said it is difficult to prove an investor’s intent in disclosure cases.
The decision coincided with a barrage of now-deleted and not-always-serious tweets from Musk proposing major changes to the company, such as dropping ads — its chief source of revenue — and transforming its San Francisco headquarters into a homeless shelter.
The company reported a net loss of $221 million for 2021 largely tied to the settlement of a lawsuit by shareholders who said the company misled investors about how much its user base was growing and how much users interacted with its platform.