Tesla CEO Elon Musk will not join Twitter’s board as previously planned, Twitter CEO Parag Agrawal announced on Sunday.
“Elon Musk has decided not to join our board,” said Agrawal in a note to the company that he posted on Twitter. “I believe this is for the best.”
Musk was scheduled to join the board effective April 9, but Agrawal said in the note that the Tesla chief “shared that same morning that he will no longer be joining the board.” Musk recently revealed that he is a 9.2% owner of Twitter, making him the company’s biggest shareholder.
Shares of Twitter fell more than 8% in premarket trading on Monday after Agrawal announced that Musk wouldn’t become a board member. CNBC noted that the company’s stock went below $43 per share at 4 AM ET. By 8 AM ET, the shares were up to $45 in an overall drop of 2.66%.
“There will be distractions ahead, but our goals and priorities remain unchanged,” Agrawal added. “Let’s tune out the noise, and stay focused on the work and what we’re building.”
The reversal on plans to have Musk join Twitter’s board may have implications for several ETFs with holdings in Twitter Inc. (Nasdaq: TWTR), including the Invesco Dynamic Media ETF (PBS), the Invesco S&P 500 Equal Weight Communication Services ETF (EWCO), the Invesco S&P 500 High Beta ETF (SPHB), and the Invesco S&P 500 Equal Weight ETF (RSP).
PBS seeks to track the investment results of the Dynamic Media Intellidex Index. The fund generally will invest at least 90% of its total assets in the securities that comprise the underlying index. TWTR makes up 7.23% of PBS.
EWCO seeks to track the investment results of the S&P 500® Equal Weight Communication Services Plus Index. The fund generally will invest at least 90% of its total assets in the securities that comprise the underlying index. TWTR makes up 5.79% of EWCO.
SPHB tracks the S&P 500 High Beta Index, which “consists of the 100 stocks from the S&P 500 Index with the highest sensitivity to market movements, or beta, over the past 12 months. Beta is a measure of relative risk and is the rate of change of a security’s price,” according to Invesco. TWTR makes up 1.32% of SPHB.
RSP is linked to an equal-weighted index, meaning that component companies receive approximately equal allocations. This results in exposure that is considerably more balanced than other alternatives, and a methodology that has often resulted in outperformance. TWTR makes up 0.26% of RSP.
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