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Social media stocks mixed following news that Elon Musk won’t join Twitter’s board

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Yahoo Finance Live examines the impact Tesla CEO Elon Musk's opting out of joining the Twitter board has on other social media stocks, and the outlook of Musk's potential influence on the platform going forward.

Video Transcript

- Welcome back to Yahoo Finance Live, everyone. We've got just inside of 50 minutes left in today's trading activity. And we wanna take a quick look at some of these social media stocks here on the day. Meta platforms are seeing that lower by a little more than 1 and 1/2%. Certainly has been a tumultuous start to 2022 for Facebook, the parent company, of course, of Meta platforms. But ticker symbol still FB as of right now.

We're also taking a look at Snap, the brand of Ghostface Killah. Yeah, that's chilling on the day. It's down by about 2 and 1/2% on ice. And we're also seeing Alphabet Google, that is down by about 2.7%. However, the lone gainer is Twitter. And we're gonna get into the news on that. Shares are higher by about 3% on the day. And after disclosing a 9.2% stake in Twitter, Elon Musk has suspended intentions to join the board of directors at the micro-blogging company whose platform Musk actively uses and is quite notoriously a user of for better or for worse.

Twitter CEO Parag Agrawal sent a letter to employees which he shared on his own Twitter account. And in part, he said that "Elon will no longer be joining the board. I believe this is for the best. We always and will value the input from our shareholders whether they are on our board or not." He goes on to say as well as part of this post that "our biggest shareholder-- Elon is our biggest shareholder. And we will remain open to his input. There will be distractions ahead, but our goals and priorities remain unchanged."

Dave and Rochelle, I wanna bring you into this because as part of the process, of course, this was announced just last Tuesday. What a difference seven days makes. But as part of the process, Elon would've been appointed to the board contingent on a background check, formal acceptance as well. And so with all of this in mind, it seems that on Elon's side, it perhaps-- end for Twitter's side, it allows them to both avoid a good level of distraction. If Elon was on this board, that certainly does take some time away from the other obligations that he does have especially on a fiduciary duty front to shareholders of not just the private macro unicorn of SpaceX but also the publicly traded entity of Twitter as well. Rochelle, I'd love to know your thoughts on this especially considering this being the hugest news of the day seemingly on the Musk front.

- So I thought it was interesting that when obviously this pairing was announced, a lot of people were like, how is Elon going to shake up Twitter? How is it going to make it different, better, perhaps more inclusive depending on your thoughts? But perhaps people-- they really didn't consider how this was going to affect Twitter.

You have a very dynamic CEO in Elon Musk, who has a lot of ideas. He was firing these ideas all weekend long. And you did start to get that inkling that perhaps that this wouldn't be the best fit. Obviously he does a lot of polls on Twitter. And when you sort of couple that with your fiduciary duty and some of the lines that he's come up against or perhaps crossed in some cases with the SEC, maybe this is the move to sort of tone things down and calm the noise. Perhaps this is something he can revisit later.

But I'm not entirely surprised that this is how it ended up. But it could be temporary. Who knows? Dave, what do you think?

- I think we are far from done with this conversation. I just don't understand the move from Twitter itself. If you invite that friend to your party, we all know that friend. That friend who's gonna come, they're gonna get hammered. They might break something. They might even throw up. You know what comes with that friend.

And you knew it was gonna come with Elon Musk. And then suddenly you're surprised over the weekend when he drops some rather sophomoric tweets about Twitter in itself? In particular, the one about dropping the W from Twitter, which was really beneath Elon-- beneath a 15-year-old at this point, but then deleted those tweets.

If I'm Twitter, I think it's one of those things where you keep your friends close and the enemies closer. Keep him on that board. Try to rein him in. He can help you build this platform. And as a member of the board, remember, he's limited at 14.9% of shares. Now he's not. Now he has no limits.

And let's keep in mind he's worth $274 billion. Twitter is entirely worth $37 billion. Is he going to just go away quietly? I guess I'd be shocked at that. He did like one tweet.

After deleting his criticisms, he liked a tweet that said Elon was told to play nice and not speak freely. He did not remove that like. So he wanted that to stay out there. He wanted everyone to know that he could not speak freely about Twitter. And that's clearly why this relationship ended. I do not think by any means, Brad, we've heard the end of it.

- I don't think so either. But I think what it does signal for Twitter is that perhaps they were willing to move away from being what Tesla has become or what some of Elon Musk's other companies have become, which is cult likings, cult followings at the end of the day. Tesla for itself, it had already amassed even prior to this year and prior to the past 18 months run up that it had seen to the point where they were able to announce these stock splits and go forward and still see their share price rise even higher from those points.

It had a cult following. It was this core base of users-- either purchasers of the car or just purchasers of the shares itself on the belief that Elon was going to revolutionize the world. The question for Twitter in this instance is do we want to have that figure also annexing this cult-like following to Twitter, to our shares, to our company? And for better or for worse, again, kind of giving this a circular ending. That's exactly what Twitter had to think about. And I think that's the calculus that really weighed on a decision like this as well at the end of the day.

- Look, Twitter-- Elon's not just more valuable than Twitter. He's bigger than Twitter. I think he could've done great things there if they were just going to deal with some of the criticisms that are inherent with someone like Elon Musk. Again, we have not heard the end of this. Is it hostile moving forward? Wouldn't surprise any of us. Coming up, our triple play. All three of us pick a stock in the news and tell you why it's on the move right after a short break.