4.2 Market Reaction
(1) Market volatility: Studies have found that Musk's
public statements and social media activity tend to
cause wild market swings. For example, his tweets
could cause big swings in Tesla's stock price.
(Example: Analyzing the impact of Musk's Tweets
on the short-term performance of Tesla stock) (Fama,
1970).
(2) Investor confidence: While it may cause
market volatility in the short term, Musk's innovative
vision and leadership style have increased investor
confidence in the company in the long term.
(Example: Studying the impact of Musk's leadership
style on investors' long-term confidence) (Compers
et al., 2003).
4.3 Long-Term Financial Performance
(1) Financial growth: Research shows that The
company's financial performance has been
significantly impacted by Musk's activity,
particularly in terms of revenue growth and market
share expansion. (Example: Analysis of Tesla's
financial performance and market share changes
under Musk's leadership) (Renneboog and Szilagyi,
2011).
(2) Risk management: Despite the high risks,
Musk's innovative projects and strategic decisions
have resulted in significant financial returns for the
company over the long term. (Example: Exploring
Musk's decisions in high-risk projects and their
financial implications) (Shleifer and Vishny, 1997).
4.4 Summary
In summary, Elon Musk, as a shareholder activist,
has had a profound impact on the governance
structure, market response, and long-term financial
performance of the companies he leads. Although
their strategies may cause market volatility in the
short term, in the long term, these measures usually
lead to significant financial growth and market
expansion.
5 CONCLUSIONS
The case of Elon Musk's acquisition of Twitter
demonstrates the far-reaching effects of shareholder
activism on corporate governance structures. First,
Musk, as an activist shareholder, ultimately
facilitated the complete acquisition of the company
by publicly expressing his dissatisfaction with
Twitter's strategic direction and management. This
process demonstrates how shareholder activism can
drive change in the corporate governance structure
through market forces. After the acquisition was
completed, Twitter's governance structure underwent
a dramatic change from diverse and decentralised to
highly centralised. Musk dissolved the original board
of directors and reorganised management, changing
the company's original governance policies and
decision-making processes, and concentrating
ownership and decision-making power in the hands
of a few individuals. This change improved the
flexibility of corporate decision-making while
weakening the independent oversight processes of
traditional corporate governance, but it also brought
greater risk and uncertainty. Overall, The instance of
Musk purchasing Twitter demonstrates the powerful
force of shareholder activism in corporate
governance. It can not only directly affect the
ownership structure of a company, but also
profoundly change its management model, culture
and strategic direction.
AUTHORS CONTRIBUTION
All the authors contributed equally and their names
were listed in alphabetical order.
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