Musk’s rejection of Twitter board seat escalates fight with the platform, regulators

Billionaire Elon Musk is off of Twitter’s board, but he is not out of the messy food fight for control of the social media platform’s future.

The electric vehicle and space technology tycoon’s regulatory filing on Monday confirming his decision not to join the board will likely be closely scrutinized by regulators watching to see if he aggressively pursues more control of the company or a bigger financial stake.

Mr. Musk’s filing with the U.S. Securities and Exchange Commission explicitly avoids saying whether he will now look to amass a larger share of the company’s stock.

Mr. Musk’s purchase of a 9.2% stake in Twitter made him the company’s largest shareholder, and his filing on Monday said he “has no present plans or intentions” relating to various transactions he may later choose to make about the company’s stock.

Former SEC Chair Jay Clayton noted that regulators are likely closely monitoring Mr. Musk’s activity surrounding Twitter now.

“I have no doubt that regulators are looking at this,” Mr. Clayton told CNBC of Mr. Musk’s actions. “I have no special information but it’s the kind of thing that you would at least take a look at.”

Mr. Musk is no longer bound by a provision limiting his acquisition of more Twitter stock, but any move he makes will likely be more visible to the public. A Twitter regulatory filing from last week said Mr. Musk would not own more than 14.9% of Twitter’s stock individually or with a group once he joined the board or for 90 days after his departure.

With that limitation gone now that Mr. Musk has rejected a board seat, some tech and financial analysts have speculated that the billionaire will grow more aggressive.

Disclosure obligations surrounding Mr. Musk’s new status this week with the company will make any attempt by him to take over Twitter or dump his stock more transparent, according to Mr. Clayton.

Twitter CEO Parag Agrawal announced Mr. Musk’s decision to forego the board position on Sunday night in a note imploring employees to ignore the noise incoming about the billionaire’s decision and the company’s future.

“There will be distractions ahead, but our goals and priorities remain unchanged,” Mr. Agrawal said to employees in the note. “The decisions we make and how we execute is in our hands, no one else’s. Let’s tune out the noise, and stay focused on the work and what we’re building.”

Twitter’s relationship with its largest shareholder appears to be turning icy fast. Twitter canceled a question-and-answer session between Mr. Musk and the company’s employees scheduled for this week, according to Bloomberg.

Mr. Musk has also deleted posts on Twitter published in recent days that portray the company in an unfavorable light. For example, a Saturday tweet from Mr. Musk that polled his followers about whether Twitter’s San Francisco headquarters should be converted into a homeless shelter “since no one shows up anyway” to work there displayed a message on Monday saying it was deleted.

The billionaire also “liked” a tweet published Monday saying “Elon was told to play nice and not speak freely.”

Mr. Agrawal’s message to employees about Mr. Musk’s changing status noted that all board members are expected to act in the best interest of all shareholders and the board. Mr. Musk’s regular critiques of the company may not be what Mr. Agrawal expected when he welcomed him with open arms last week.