Social media stocks mixed after news that Elon Musk will not join Twitter’s board
Yahoo Finance Live examines the impact Tesla CEO Elon Musk’s withdrawal from joining Twitter’s board is having on other social media stocks, and the outlook for Musk’s potential influence on the platform. -shape in the future.
– Welcome to Yahoo Finance Live, everyone. We have just under 50 minutes left in today’s business activity. And we want to take a quick look at some of these social media stocks here that day. Meta platforms are seeing this drop by just over 1 and 1/2%. 2022 has certainly been a tumultuous year for Facebook, the parent company, of course, of the Meta platforms. But the ticker symbol is still FB at the moment.
We also take a look at Snap, Ghostface Killah’s brand. Yeah, it’s scary in the daytime. That’s down about 2 and 1/2% on ice. And we also see Alphabet Google, which is down about 2.7%. However, the only winner is Twitter. And we’re going to get into the news about it. Stocks are about 3% higher on the day. And after disclosing a 9.2% stake in Twitter, Elon Musk suspended his intentions to join the board of directors of the micro-blogging company whose platform Musk actively uses and is notoriously a user for the better. or worse.
Twitter CEO Parag Agrawal sent a letter to employees which he shared on his own Twitter account. And in part, he said “Elon will no longer be joining the board. I think that’s for the best. We always and will appreciate the input of our shareholders, whether or not they’re on our board. administration.” He goes on to say as well as part of this post that “our largest shareholder – Elon is our largest shareholder. And we will remain open to his input. There will be distractions ahead, but our goals and priorities remain unchanged. .”
Dave and Rochelle, I want to share this with you because as part of the process, of course, it was announced last Tuesday. What a difference seven days make. But as part of the process, Elon was reportedly appointed to the board subject to a background check, as well as formal acceptance. And so with all of that in mind, it looks like on Elon’s side, maybe it’s – and on Twitter’s side, it allows them both to avoid a good level of distraction. If Elon was on that board, it certainly takes a while compared to the other obligations he has, especially in terms of the fiduciary duty to the shareholders of not only the private macro unicorn of SpaceX, but also of the publicly traded entity of Twitter. Rochelle, I’d love to hear your thoughts on this, especially since it’s the biggest news of the day seemingly on Musk’s front.
– So I thought it was interesting that when this pairing was announced, a lot of people were like, how is Elon going to shake up Twitter? How is it going to make it different, better, maybe more inclusive in your thoughts? But maybe people – they really haven’t considered how this is going to affect Twitter.
You have a very dynamic CEO in Elon Musk, who has a lot of ideas. He’s been tossing around these ideas all weekend. And you started to realize that might not be the best solution. Obviously, he does a lot of polls on Twitter. And when you kind of couple that to your fiduciary duty and some of the lines that he’s met or maybe crossed in some cases with the SEC, maybe that’s the decision to tone things down and calm down the noise. Maybe it’s something he can revisit later.
But I’m not entirely surprised that it ended like this. But it could be temporary. Who knows? Dave, what do you think?
– I think we are far from having finished this conversation. I just don’t understand the Twitter movement itself. If you invite this friend to your party, we all know this friend. This friend who’s coming, they’re going to get hammered. They might break something. They might even vomit. You know what comes with this friend.
And you knew it was coming with Elon Musk. And then suddenly you’re surprised this weekend when he posts some pretty sophomoric tweets on Twitter per se? In particular, the one about deleting the W from Twitter, which was really below Elon – below a 15-year-old at this point, but then deleted those tweets.
If I follow Twitter, I think it’s one of those things where you keep your friends close and the enemies closer. Keep it on this board. Try to master it. He can help you build that platform. And as a member of the board of directors, remember, he is limited to 14.9% of the shares. Now he is no longer. Now there are no limits.
And let’s keep in mind that he’s worth $274 billion. Twitter is entirely worth $37 billion. Will he just walk away quietly? I guess I would be shocked by that. He liked a tweet.
After deleting his criticism, he liked a tweet that told Elon to play nice and not speak freely. He didn’t remove that genre. So he wanted it to stay there. He wanted everyone to know that he couldn’t talk freely about Twitter. And that’s clearly why this relationship ended. I don’t think at all, Brad, that we’ve heard the end of it.
– I don’t think so either. But I think what this signals to Twitter is that maybe they were ready to move away from what Tesla has become or what some of Elon Musk’s other companies have become, that’s i.e. cult likes, cult followings ultimately. Tesla for himself he had already amassed even before this year and before the last 18 months he had seen to the point where they were able to announce these stock splits and go ahead and see yet their share price rise even higher from these points.
He had a cult following. It was that user base – either the buyers of the car or just the buyers of the stocks themselves, convinced that Elon was going to revolutionize the world. The question for Twitter in this case is do we want this number to also append this cult following to Twitter, to our stocks, to our company? And for better or worse, again, kind of give this a circular ending. This is exactly what Twitter had to think about. And I think it was the math that really weighed in on a decision like this too in the end.
– Look, Twitter… Elon isn’t just more valuable than Twitter. It’s bigger than Twitter. I think he could have done great things there if they had just faced some of the criticism inherent in someone like Elon Musk. Again, we haven’t heard the end of it. Is it hostile to move forward? It wouldn’t surprise any of us. Coming soon, our triple play. The three of us pick a stock in the news and tell you why it’s hot right after a short break.