Musk takes 9.2% stake in Twitter: Shares soar 25% as Elon Musk becomes largest shareholder

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Reuters reports that on April 4, CEO Elon Musk of Tesla Inc (TSLA.O) disclosed a 9.2 percent interest in Twitter Inc (TWTR.N), valued at about $3 billion, putting him in a position to become the company’s largest stakeholder and causing its stock to jump more than 20% in a single day. Musk’s decision comes on the heels of a tweet in which he said that he was giving “serious consideration” to the creation of a new social media platform, while also doubting Twitter’s commitment to free expression.

The founder of Tesla, Elon Musk, is a frequent Twitter user who has amassed more than 80 million followers since joining the site in 2009. Musk has used the medium to make various announcements, including suggesting a Tesla takeover that put him in regulatory hot water. His views on the social media site and its practices have shifted recently, and he believes the firm is hurting democracy by failing to uphold free-expression values.

Great Hill Capital LLC managing member Thomas Hayes stated that the move “sends a message to Twitter.” “Having a big investment in the firm will keep them on their toes because that passive stake may very rapidly become an active one,” he said. Musk, who is also one of the world’s wealthiest people, has been selling his position in Tesla since November when he announced that he would sell off 10 percent of his ownership in the electric-car producer. Since then, he has sold shares for a total of $16.4 billion, which is a record for him.

Following the release of a regulatory filing on Monday, it was revealed that Musk owns 73.5 million Twitter shares, which are controlled through the Elon Musk Revocable Trust, of which he serves as sole trustee. The Vanguard Group is the second-largest stakeholder in Twitter, with an 8.79 percent holding, according to statistics from Refinitiv.

A client note from CFRA Research analyst Angelo Zino said that Musk’s real stake “is a very modest proportion of his fortune” and that a “full-scale takeover should not be ruled out.”

Twitter was the focus of activist investor Elliott Management Corp in 2020 when the hedge fund alleged that the company’s then-CEO and co-founder, Jack Dorsey, was devoting too little attention to Twitter while simultaneously overseeing the financial technology company Square.

Agrawal, a 10-year industry veteran who has held the position of CEO and chairman since November of last year, took over for Dorsey, who still had a more than 2 percent ownership in the firm at the time of his resignation.

Musk and Dorsey, on the other hand, have found some common ground in their dismissiveness of the so-called Web3, an ambiguous concept that refers to a utopian version of the internet that is decentralized. Twitter’s stock was trading at $47.19 per share. Through Friday’s closing, they had lost 38 percent in the previous 12 months………. Reuters reached out to Twitter for comment but did not get a response. Other social media companies, like Meta Platforms (FB.O) and Snapchat owner Snap Inc (SNAP.N), saw their stock prices rise as a result of the announcement.

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