Elon Musk is now lord of the estate at Twitter after the board of directors was dissolved as part of the merger agreement. While the state of affairs may not be permanent, it does mean that as the owner, director and ‘Chief Twit’ he has ultimate power to hire, fire and change the social media platform.
In an SEC fileThe company has detailed some of the many changes related to Musk’s controversial purchase of the platform:
[A]As a result of the merger’s completion, Mr. Musk became the sole director of Twitter. Subject to the terms of the Merger Agreement, effective as of the effective date of the Merger, the following persons, who were directors of Twitter prior to the effective time of the Merger, are no longer directors of Twitter: Bret Taylor, Parag Agrawal , Omid Kordestani, David Rosenblatt, Martha Lane Fox, Patrick Pichette, Egon Durban, Fei-Fei Li and Mimi Alemayehou.
You may recognize some or all of those names, and the Twitter sign was definitely a Silicon Valley who’s-who. But their watch is over and the deal they’ve been bickering about is closed.
This is not an unprecedented step in a private takeover of a publicly traded company, but only part of the process. The board of directors represented the former shareholders and now those shares are owned by someone else. It is not uncommon for a board to be evicted in this way and new ones to be installed as a decision-making and advisory body alongside the company management. That said, because there are so few examples of private takeovers on this scale, let alone examples with a similar context, it’s hard to say with any certainty what “normal” would be.
In any case, the upshot is that Twitter currently has a dictator, and that dictator is reportedly using that power to make sweeping changes, such as company-wide cuts and charging verification fees.
How Musk plans to structure leadership at Twitter is still a mystery, probably as much for him as it is for anyone else, but as the sole director it’s pretty much his prerogative. Some of the complex and risky financing of the deal may involve installing certain individuals (or even kingdoms) in positions of real power and responsibility.
Of course, Musk isn’t doing all of this alone – he’s reportedly surrounded himself with various cronies and operators who, while they don’t have actual power yet, are undoubtedly going to do their very best to influence the sole director.