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Ex-CEO Dorsey criticizes the Twitter board, saying that Musk has no shares

Dorsey accuses Musk of not having shares on the Twitter board

April 20, 2022: -On Sunday, Former Twitter CEO Jack Dorsey criticized the company’s board in tweets as the group was tasked with evaluating a takeover bid from billionaire Elon Musk.

Responding to one more Twitter user describing the “plots and coups” that played out early on in the history of Twitter’s board, Dorsey replied, “it’s consistently been the dysfunction of the company.”

He responded to one more tweet in the same thread. It quoted venture capitalist Fred Destin who cited a “Silicon Valley proverb”: “Good boards don’t create good companies, but a bad board will kill a company every time.” Dorsey responded, “big facts.”

Dorsey is planning to leave once his term expires at the 2022 meeting of shareholders, which is scheduled for May, as he still is on twitter’s board.

On Friday, Twitter’s board adopted a poison pill. This limited duration shareholder rights plan permits shareholders to buy the stock at a discount if anyone or entity amasses at least 15% of outstanding common stock without the board’s prior approval. The board considers Tesla CEO Musk’s $43 billion offering to buy the company and take it private. It’s reportedly fielding additional interest. Musk recently revealed an over 9% stake in the company before his takeover bid.

The board said the plan would not prevent it from taking a deal in the best interest of the company and its shareholders. Still, it would “reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or providing the Board sufficient time to make informed judgments and take actions in the best interests of shareholders.”

Dorsey, who also co-founded the company, served an earlier stint as its CEO but was fired in 2008 and replaced with another one of his co-founders. He returned to lead the company in 2015.

Musk tweeted Saturday that, with Dorsey leaving the board, “the Twitter board collectively owns almost no shares! Objectively, their economic interests are not aligned with shareholders.”

Dorsey recently noted that he “ended up with very little of the company” because it took many of his shares when he was fired in 2008. He said he also gave 1% of the company back to employees in 2015. Still, according to FactSet, Dorsey remains the largest insider stakeholder of the company after Musk’s 9.1%, with about 2.25% of shares. After that, Silver Lake, whose CEO Egon Durban is a Twitter board member, owns 0.26%, according to FactSet. According to FactSet, the Vanguard Group is the largest institutional shareholder, with a 10.29% stake in the company.

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