Twitter shareholders gathered on Wednesday for their regularly scheduled meeting, as the company faces turmoil over billionaire Elon Musk’s $44bn takeover bid.
Wednesday’s gathering did not include a vote on Musk’s plan to purchase the social media platform – that vote will take place at a yet-undetermined date in the future.
But the shareholders raising proposals for a vote frequently invoked the Tesla CEO’s name.
Investors on Wednesday preliminarily approved one proposal, by the New York State common retirement fund, that called for a report on Twitter’s policies and procedures around political contributions using corporate funds.
Two proposals brought by conservative-leaning groups failed to garner enough votes to pass. One called for an audit on the company’s “impacts on civil rights and non-discrimination” and referred to “‘anti-racism’ programs that seek to establish ‘racial/social equity’” as “themselves deeply racist”. The other sought more disclosure on the company’s lobbying activities.
Musk in April reached a deal to buy the social media platform at $54.20 a share. But he said in May the deal cannot progress until the platform proves that fewer than 5% of its users are fake or spam accounts.
The sharp turnaround by the world’s richest man makes little sense except as a tactic to scuttle or renegotiate a deal that is becoming increasingly costly for him, experts said last week. That the discussions are playing out publicly, on Twitter no less, only adds to the chaos.
Experts say Musk cannot unilaterally place the deal on hold. If Musks walks away, he could be on the hook for a $1bn breakup fee. Alternatively, Twitter could sue Musk to force him to proceed with the deal, although experts think that is highly unlikely.
Twitter investors are set to vote on five stockholder proposals on Wednesday, all opposed by management. The proposals include asking the company to produce a report on its impact on civil rights and another on its lobbying activities.
Even if shareholders approve any of the proposals, it will be non-binding, said Donna Hitscherich, a professor of finance at Columbia Business School.
Twitter co-founder Jack Dorsey’s term as a board member will expire on Wednesday. Two other directors will stand for re-election at the meeting.
Shares of Twitter were up $1.09, or 3%, at $36.83 in early afternoon trading on Wednesday.