Elon the Outsider

Elon Musk has 81 million Twitter followers, and he has used the platform to, among other things, criticize Twitter’s left-wing, anti-free speech practices. So the news that he had become Twitter’s largest shareholder with a 9 percent stake was seismic. It was soon followed by an invitation to join Twitter’s board of directors, which he initially seemed to accept. But on Saturday Musk announced that he was declining the offer of a board seat.

Why did he do that? As a member of Twitter’s board of directors, he would have had a fiduciary duty to the company that likely would have barred him from publicly criticizing it–e.g., on Twitter. Also, as a board member his ownership stake would have been limited to 14.9% of the company’s outstanding shares. By remaining an outsider, Elon preserves the opportunity for a hostile takeover, or, less dramatically, a controlling influence on the board.

All of which bodes well for those of us who fear that the dominant platforms, like Twitter and Facebook, may be natural monopolies due to network effects, and who care about diversity in what has become the de facto public square.

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