Tesla Chief Executive Elon Musk will take a seat on Twitter's board of directors, the social media firm announced Tuesday. But Musk indicated that he won't take an overly aggressive stance at the company. Twitter stock rose.
Twitter Chief Executive Parag Agrawal announced the appointment in a tweet. It comes after Musk grabbed a 9.2% stake in the company for $2.89 billion. Musk reported owning almost 73.5 million shares of Twitter.
"Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board," CEO Parag Agrawal wrote.
Musk did, however, indicate he will push for adjustments.
"Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in the coming months!" he tweeted.
Twitter Stock Action
Twitter stock climbed 2%, closing at 50.98 on the stock market today, after soaring 27% on Monday. Tesla stock dropped 4.7% to 1,091.26.
In December, following the appointment of Parag Agrawal as the new CEO, replacing Jack Dorsey, Musk indicated that he did not agree with the appointment and that he desired some changes. Musk criticized Twitter for what he said was suppression of free speech.
"Is a new platform needed?" Musk asked his 80 million Twitter followers in December.
He added, "Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?"
But Agrawal welcomes the criticism from Musk.
"He's both a passionate believer and intense critic of the service," Agrawal said. "This is exactly what we need on Twitter, and in the boardroom, to make us stronger in the long-term."
Wedbush analyst Daniel Ives said Musk's addition to the board is a positive move for Twitter stock.
"This was a friendly move by the Twitter board to embrace Musk with open arms as clearly a passive stake is just the start of his involvement in Twitter," Ives said in a note to clients.
Not An Issue For Tesla
"The Street will clearly like this news as Musk's positive influence will be embraced by investors as seen by the stock's reaction yesterday." In addition, Ives said, "We continue to believe Musk being more involved at Twitter further expands his massive ecosystem and reach."
Ives said that Musk joining Twitter "will lead to a host of strategic initiatives which could include a range of near-term and long-term possibilities out of the gates."
Musk, in addition to being the CEO of Tesla, is chief executive at SpaceX.
"His key roles at SpaceX and Tesla should NOT be an issue or major worry for investors at this pivotal time," Ives wrote. He maintained an outperform rating on Tesla stock, with a price target of 1,400.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
