Twitter tumbled more than 8% after Elon Musk abandons plan to join the board

As you may recall, yesterday Tesla CEO Parag Agrawal revealed that Elon Musk has declined to join the company’s Board of Directors. Then a few hours ago, Musk also disclosed an $11 billion short position in Twitter.

Immediately after the news, shares of Twitter tumbled more than 8% in premarket trading Monday. The social media company’s dropped to less than $43 a share at 4 a.m. ET before recovering slightly. At 8 a.m. ET, the shares were down 2.66% at $45, according to a report from CNBC.

Musk suddenly declines a seat on Twitter’s board, opening the door to a hostile takeover. The announcement follows Musk’s recent acquisition of a 9.2% stake in Twitter last week, making him the company’s largest shareholder.

In last Tuesday’s formal announcement, Twitter had said that Musk would be joining the Board of Directors but Musk later declined the board seat. CEO Parag Agrawal said “I believe this is for the best” and Musk bizarrely tweets then deletes a single emoji following the news.

In a tweet on Sunday evening, Agrawal announced that Musk had decided not to take up his seat.

“Elon Musk has decided not to join our board,” wrote CEO Parag Agrawal, adding “We were excited to collaborate and clear about the risks. We also believed that having Elon as a fiduciary of the company where he, like all board members, has to act in the best interests of the company and all our shareholders, was the best path forward.”

Agrawal also added:

“Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same morning that he will no longer be joining the board. I believe this is for the best. We have and will always value input from our shareholders whether they are on our Board or not.”

Elon has decided not to join our board. I sent a brief note to the company, sharing with you all here. pic.twitter.com/lfrXACavvk

— Parag Agrawal (@paraga) April 11, 2022

It all started on March 24, when Musk first asserted that the “Twitter algorithm should be open source.”  Twitter founder, Jack Dorsey, immediately responded by saying that “the choice of which algorithm to use (or not) should be open to everyone.”