> Moreover, he only owns 20% of the company.

There's nothing only about owning 20% of a public company.

20% and the largest shareholder, is more than enough to turn any public company inside out. Hedge funds do it all the time with dramatically weaker positions of single digit ownership. Carl Icahn routinely does it with a few percent. It's an immense position in the public markets in terms of wielding power.

20% is not enough, you need to wrangle the remaining votes which is not a sure thing.

'Hedge Funds' do this by forming a cabal with other funds and institutional investors.

This is totally unlike Alphabet or Facebook etc. where there is real and direct power.

I don't doubt is shareholders really wanted him gone they could punt Musk.

Appointing the 2 additional board members now means Musk can be outvoted. His 20% holding doesn't give him majority vote.

I've seen that pattern too but I don't get it. Why would single digit percentages matter that much?

It matters when it's a big chunk and the fund leads a movement among shareholders many of whom may be tiny, dispersed, or possibly passive.