June 29, 2022

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Twitter investors gather amid turmoil over Elon Musk’s bid | Twitter

Twitter shareholders gathered Wednesday for their regular meeting, as the company faces turmoil over billionaire Elon Musk’s $44 billion takeover bid.

Wednesday’s meeting did not include a vote on Musk’s plan to buy the social media platform — that vote will take place at an unspecified date in the future.

But shareholders who put proposals to vote often invoked the name of Tesla’s CEO.

On Wednesday, investors tentatively approved one proposal, by the New York State Joint Retirement Fund, which called for a report on Twitter’s policies and procedures on political contributions using corporate money.

Two proposals by conservative-leaning groups failed to garner enough votes to pass them. One called for a review of the “company’s impacts on civil rights and nondiscrimination” and referred to “anti-racism” programs that seek to establish “racial/social justice” as “extremely racist.” The other sought more disclosure of the company’s lobbying activities.

Investors also blocked Musk’s ally from being re-elected to the board, and voted against Egon Durban, co-chair of private equity firm Silver Lake, who has partnered with Tesla CEO Musk in his abandoned bid to make the electric car maker private.

“The Twitter board has not embraced Elon Musk and his vision for Twitter. So the fact that his ally was removed from the board is not surprising,” said Kim Forrest, chief investment officer at Bouquet Capital Partners in Pittsburgh.

The vote could signal skepticism among shareholders about Musk’s plan or his willingness to pay what he offered, but investors are expected to overwhelmingly approve the deal.

Twitter’s board of directors initially voted to adopt “toxic pills” that limited Musk’s ability to increase his stake in the company, but later voted unanimously to accept the takeover offer.

Musk in April come to an agreement to purchase the social media platform at $54.20 per share. But he said in May the agreement can’t progress Until the platform proves that less than 5% of its users are fake accounts or spam.

Experts said last week that the world’s richest man’s sharp turnaround was meaningless except as a tactic to thwart or renegotiate a deal that has become increasingly costly for him. Having the discussions public, on Twitter no less, adds to the chaos.

Experts say Musk cannot unilaterally suspend the deal. If Musk goes too far, he could be in trouble for a $1 billion breakup fee. Alternatively, Twitter could sue Musk to force him to go through with the deal, although experts believe this is highly unlikely.

Even if any of the offers were approved by shareholders, they would be non-binding, said Donna Hitscherich, a professor of finance at Columbia Business School.

Twitter co-founder Jack Dorsey’s term as a board member will end on Wednesday. Investors have re-elected Patrick Bechet, General Partner of Inovia Capital, to the Board of Directors.

Twitter shares rose $1.09, or 3%, to $36.83 in early afternoon trading Wednesday.

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