Elon Musk, the CEO of Tesla Inc, unveiled a 9.2 per cent stake in micro blogging site Twitter Inc, worth about $3 billion, putting him as the microblogging site’s largest stakeholder and causing its stock to surge more than 20%.
Musk’s move comes just days after he tweeted that he was “considering” creating a new social media platform and questioned Twitter’s commitment to free expression.
Since joining Twitter in 2009, Musk has amassed over 80 million followers and has used the network to make various announcements, including dangling a Tesla go-private proposal that landed him in regulatory hot water.
He has recently been critical of the social media platform and its practises, claiming that the corporation is hurting democracy by not adhering to free-speech values.
“It does send a message to Twitter … having a meaningful stake in the company will keep them on their toes, because that passive stake could very quickly become an active stake,” said Thomas Hayes, managing member at Great Hill Capital LLC.
Musk, who is also one of the world’s wealthiest people, has been selling his Tesla stock since November, when he announced that he would sell 10% of his ownership in the electric carmaker. Since then, he has sold $16.4 billion worth of stock.
Elon Musk, CEO of Tesla, speaks with Todd Howard, a famed game designer, during the E3 gaming convention in Los Angeles.
Musk holds 73.5 million Twitter shares, according to a regulatory filing on Monday, which are held by the Elon Musk Revocable Trust, of which he is the sole trustee. According to Refinitiv statistics, Vanguard is Twitter’s second-largest shareholder, with an 8.79 percent holding.
“Musk’s actual investment is a very small percentage of his wealth and an all-out buyout should not be ruled out,” CFRA Research analyst Angelo Zino wrote in a client note.
Elliott Management Corp, an activist investor, targeted Twitter in 2020, claiming that its then-CEO and co-founder, Jack Dorsey, was paying too little attention to Twitter while also running Square.
In November of last year, Dorsey, who owns more than 2% of Twitter, stood aside as CEO and chairman, handing over the reins to 10-year industry veteran Parag Agrawal.
Meanwhile, Musk and Dorsey have found some common ground by criticising the so-called Web3, a nebulous notion for a decentralised utopian internet.
Twitter’s stock was trading at $47.19 per share. They’ve down 38 per cent in the last 12 months as of Friday’s close. Twitter did not respond to a request for comment from Reuters.
Other social media companies, such as Meta Platforms and Snap Inc, which owns Snapchat, were also up on the news.
(Adapted from NDTV.com)