Updated at 8:52 am EST
Twitter (TWTR) – Get Twitter, Inc. Report shares extended gains Tuesday after Tesla (TSLA) – Get Tesla Inc Report CEO Elon Musk was given a seat on the board of the micro-blogging website just days after revealing a major stake in the group.
Musk will be named a ‘class II’ director at Twitter for a period of two years, the company said, in exchange for an agreement that the billionaire investor won’t increase his stake to more than 14.9% of the group’s outstanding shares.
Musk, who revealed a “passive” 9.2% stake in the group through a Securities and Exchange Commission filing yesterday, is now Twitter’s largest individual shareholder. Musk Tweeted that he hoped to make “significant improvements to Twitter in the coming months”.
“Other than as described … there are no arrangements or understandings between Mr. Musk, on the one hand, and the Company or any other persons, on the other hand, pursuant to which Mr. Musk was selected as a director,” Twitter said in a filing with the U.S. Securities and Exchange Commission. “There are no related party transactions between the Company and Mr. Musk (or any of his immediate family members) requiring disclosure under Item 404(a) of Regulation S-K. Mr. Musk does not have any family relationships with any of the Company’s directors or executive officers.”
Twitter shares were marked 6.2% higher in pre-market trading to indicate an opening bell price of $53.05 each.
Musk has wasted little time in exercising his influence on the group, pushing a poll to his 80.4 million Twitter followers on Monday asking if they would like to see an edit feature added to the website.
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Twitter CEO Parag Agrawal, who recently took over from the departing founder Jack Dorsey, asked Twitter users to “vote carefully”, adding that “the consequences of this poll will be important” in a move that clearly suggests Musk’s views are being actively considered by Twitter executives.
At last count, 73.5% of the 2.5 million people who voted in the poll had selected “yes” to Musk’s edit feature question.
Twitter earlier this year that non-GAAP earnings for the three months ending in December were pegged at 33 cents per share, down 13.1% from the same period last year and 2 cents shy of the Street consensus forecast. Group revenues rose 22% to $1.57 billion, matching Street forecasts, with $1.47 billion coming from its advertising division.
Looking into the coming year, Twitter said it sees revenue growth in the “low to mid 20% range” and held onto its 2021 guidance that sees $7.5 billion in revenues and 315 million daily active users by 2023.
Late last year, Late last year, Twitter founder Jack Dorsey stepped down as CEO of the group to make way for former CTO Parag Agrawal.
Dorsey will remain on the board until at least 2022, the company said, with Bret Taylor becoming independent chairman.
Dorsey, 36, co-founded Twitter in 2006 but was forced out as CEO two years later. He was brought back in 2015, however, in a effort to re-boot growth — and tackle online abuse — amid the social media group’s growing global influence.