It’s been a wild week for both Dogecoin (DOGE) and Twitter. Dogecoin (DOGE) rallied to its highest point in the past three months following the announcement of Elon Musk joining Twitter’s board of directors.
However, the hype preceding this announcement was short-lived, as Elon Musk would soon backtrack this decision on the following Sunday. As a result, Dogecoin’s price has slumped considerably from its rally of US$0.18, back down to $0.1385 at the time of writing. Let’s dive into detail regarding this event-packed week, and the full extent of implications bought about by Musk’s decisions.
Elon Musk decides not to join the Twitter board
Contrary to the announcement made last week, Elon Musk revealed that he would no longer be joining Twitter’s board of directors. This announcement was made on Sunday by Twitter CEO Parag Agrawal on the social media platform.
“We announced on Tuesday that Elon would be appointed to the Board contingent on a background check and formal acceptance. Elon’s appointment to the board was to become officially effective 4/9, but Elon shared that same morning that he will no longer be joining the board,” wrote Agrawal. “I believe this is for the best. We have and will always value input from our shareholders whether they are on our Board or not. Elon is our biggest shareholder and we will remain open to his input.”
This came as a surprise to many, given that Agrawal had previously proclaimed excitement to announce Musk’s joining the board, and that (Musk) was expected to bring “great value” to the company. And while the reasoning behind Musk’s backtrack remains a mystery, the impact of the decision has been clear as day.
Dogecoin slumps back from a three-month peak
Following the initial announcement on Tuesday, DOGE rose by over 11% in its most prominent rally since January. This was no surprise considering how much Musk has been promoting dogecoin. With Musk as a Twitter board member and the largest shareholder, he could advocate for DOGE to become an integral part of the social media platform, pushing exposure onto its 330 million monthly users.
This idea would remain nothing more than wishful thinking, as the price of DOGE would soon tank by nearly 10% down to $0.134 (at its lowest). Musk backtracking came at a problematic time, right after the further tightening of the Federal Reserve, serving only to break down investor confidence more. His decision has also caused ramifications for Twitter’s stock, which dropped 8%.
Bob Laccino, chief strategist at Path Trading Partners and co-portfolio manager at Stock Think Tank, may have predicted this last week. Regarding the speculation that Musk’s board of directors position would be immense for DOGE’s future, Laccino stated: “It’s wishful thinking on the part of those invested in dogecoin. If anything, his position on Twitter’s board makes it harder for him to use Twitter (if we were to assume he was deliberately using Twitter for this purpose) to pump the price of anything at all. He is in much more specific danger of regulatory action if he does that.”
So far Musk hasn’t provided any reasons yet, but until then, Laccino’s comment provides one possible take on the Tesla CEO’s backtracking.