Twitter shareholders gathered for their regular meeting on Wednesday as the company faces turmoil over billionaire Elon Musk’s $44 billion takeover bid.
Wednesday’s rally did not include a vote on Musk’s plan to buy the social media platform — that vote will take place at an undetermined date in the future.
But shareholders raising ballot proposals frequently invoked the name of Tesla’s CEO.
On Wednesday, investors pre-approved a proposal from the New York State Joint Retirement Fund, which called for a report on Twitter’s policies and procedures regarding political contributions using corporate funds.
Two proposals put forward by conservative-leaning groups failed to garner enough votes to pass. One called for an audit of the company’s “civil rights and non-discrimination impacts” and called “‘anti-racism’ programs that seek to establish ‘racial/social equity'” as “deeply racist themselves”. The other asked for more information about the company’s lobbying activities.
Investors also blocked the re-election of a Musk ally to the board, voting against Egon Durban, the co-head of private equity firm Silver Lake, who has partnered with Tesla CEO Musk for his abandoned offer to privatize the electric car manufacturer.
“Twitter’s board hasn’t embraced Elon Musk and his vision for Twitter. So it’s no surprise that his ally was removed from the board,” said Kim Forrest, chief communications officer. investments at Bokeh Capital Partners in Pittsburgh.
The vote could indicate shareholders’ skepticism of Musk’s plan or his willingness to pay for what he has offered, but investors are expected to approve the deal by an overwhelming majority.
Twitter’s board initially voted in favor of adopting a ‘poison pill’ that limited Musk’s ability to increase his stake in the company, but later voted unanimously to accept his offer redemption.
In April, Musk reached an agreement to buy the social media platform at $54.20 per share. But he said in May the deal could not move forward until the platform proved less than 5% of its users were fake or spam accounts.
The abrupt reversal of the world’s richest man makes little sense except as a tactic to scuttle or renegotiate an increasingly expensive deal, experts said last week. Having the discussions take place publicly, on Twitter no less, only adds to the chaos.
Experts say Musk cannot unilaterally suspend the deal. If Musks walks away, he could be liable for $1 billion in severance pay. Alternatively, Twitter could sue Musk to force him into the deal, though experts believe that is highly unlikely.
Even if shareholders approve one of the proposals, it will not be binding, said Donna Hitscherich, professor of finance at Columbia Business School.
Twitter co-founder Jack Dorsey’s term as a board member will expire on Wednesday. Investors re-elected Patrick Pichette, general partner at Inovia Capital, to the board of directors.
Shares of Twitter rose $1.09, or 3%, to $36.83 early Wednesday afternoon.
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