Twitter's top shareholder Elon Musk decides not to join board

Elon Musk's appointment to the board was to become effective on Saturday and would have prevented him from being a beneficial owner of more than 14.9% of common stock.

 Elon Musk talks at the Automotive World News Congress at the Renaissance Center in Detroit, Michigan, January 13, 2015. (photo credit: REUTERS/REBECCA COOK)
Elon Musk talks at the Automotive World News Congress at the Renaissance Center in Detroit, Michigan, January 13, 2015.
(photo credit: REUTERS/REBECCA COOK)

Twitter Inc TWTR.N said on Sunday that Elon Musk rejected its offer to join the social media firm's board, a dramatic turn in a week when the billionaire became its biggest shareholder, and it warned of more drama with "distractions ahead."

Twitter Chief Executive Parag Agrawal said in a note posted to Twitter that the company's board held many discussions with Musk, but he did not state the reason for the Tesla TSLA.O CEO's decision.

Agrawal said the planned appointment was due to become effective on Saturday, which would have prevented the world's wealthiest person from becoming a beneficial owner of more than 14.9% of Twitter's common stock.

"I believe this is for the best," Agrawal said in the note. "There will be distractions ahead, but our goals and priorities remain unchanged."

The announcement was so abrupt that Musk was still listed on Twitter's board of directors on its website as of early Monday.

Musk, whose net worth is pegged at $274 billion by Forbes, responded only with a face-with-hand-over-mouth emoticon on Twitter. Tesla did not immediately respond to an email sent to the company seeking comment from the CEO.

Musk, who calls himself a free-speech absolutist and has been critical of Twitter, disclosed a 9.1% stake on April 4 and said he planned to bring about significant improvements to the social media platform. Read full story

The disclosure of the stake stoked widespread speculation on his intentions, ranging from a full takeover of the platform to take an active role in corporate decisions.

News of Musk taking a board seat had some Twitter employees panicking over the future of the social media firm's ability to moderate content, company sources told Reuters. 

Musk, a prolific user of Twitter, has made announcements about his company and a variety of issues to his more than 80 million followers on the social media platform.

Before taking a stake, Musk ran a Twitter poll asking users if they believed Twitter adheres to the principle of free speech.

A day after becoming the largest shareholder, he launched another poll asking users if they wanted an edit button, a long-awaited feature on which Twitter has been working. 

The Tesla boss also asked users in a poll if Twitter's headquarters should be converted into a homeless shelter, a plan backed by Amazon.com Inc's AMZN.O founder Jeff Bezos. 

On Saturday, Musk suggested changes to the Twitter Blue premium subscription service, including slashing its price, banning advertising and giving an option to pay in the cryptocurrency dogecoin. 

Twitter shares, which soared 27% on April 4 after Musk disclosed his stake, have lost 7.5% since then to Friday's close.