Elon Musk has become Twitter’s largest shareholder

When Elon Musk was thinking about privatizing Tesla in 2018, he posted on Twitter to tell the world about it. When he got stuck in traffic in 2016, he tweeted the idea of ​​a system of underground tunnels to alleviate congestion that “destroys souls”. And when he challenged Russian President Vladimir V. Putin to a one-on-one fight last month, he did broadcast on Twitter.

Now Mr. Musk puts his money where he speaks.

On Monday, the regulatory report of the Securities and Exchange Commission revealed that Mr. Musk, a billionaire, CEO of Tesla and SpaceX and the richest person in the world, bought a 9.2 percent stake in Twitter, a social media platform with over 80 million followers. It seems that the purchase will make Mr. Musk Twitter is the largest shareholder, ahead of an 8.8 percent stake in Vanguard Mutual Fund and less than a 2.3 percent stake in Jack Dorsey, a former Twitter CEO.

Mr Musk’s investment in Twitter, which he has accumulated at least since last month, was worth about $ 2.89 billion based on the company’s closing stock price on Friday. But by the end of Monday, after news of its purchase led to a rise in Twitter’s share price of more than 27 percent, it was worth about $ 3.7 billion. The shares are only a fraction of the reported net worth of Mr. $ 270 billion man.

Despite his tendency to share everything on Twitter – from business ideas, insults and memes to last weekend, his experience at the famous Berlin nightclub – Mr. Musk was unusually confused by buying shares in the company, at least initially.

“Oh hi lol” he tweeted on Monday without further explanation after news of his investment spread on Twitter. Mr. Musk, 50, did not respond to a request for comment. Twitter declined to comment.

Mr. Musk bought Twitter at a delicate time for the company, which is located in San Francisco. Mr Dorsey resigned as chief executive in November and plans to leave the company’s board when his term expires this year, after facing a shareholder activist and battling criticism from lawmakers and regulators about freedom of speech, censorship and toxic content.

Mr. Dorsey left the reins to Parag Agrawal, Twitter’s chief technology officer, who is less in Silicon Valley than Mr. Dorsey did. Mr. Agrawal reorganized the executive ranks of the company. He is also deeply interested in the “decentralized” version of Twitter, one of Mr. Dorsey’s latest projects at the company.

As part of that effort, Twitter would transfer power online to its users and provoke bohemians like Meta, the owner of Facebook and Instagram. Twitter is funding independent efforts to build a so-called open social media protocol, weaving cryptocurrency into its app and opening up to developers who want to create custom features for Twitter.

It is unclear what exactly Mr. Musk plans to do with his role on Twitter. He has criticized the company in recent weeks for failing in its view of adhering to the principle of free speech, and argued that users should be allowed to choose algorithms that choose tweets they see or make their own, instead of relying on Twitter to curate posts.

The idea was one that Mr. Dorsey advocated while running Twitter. “The choice of which algorithm to use (or not) should be open to all,” he said last month in response to a tweet from Mr. Musk advocating for algorithms that outsiders can build for the platform.

It is unclear whether Mr. Musk to ask – or be invited – to join the Twitter board. He submitted a document on securities called 13G filing, which indicates that he plans to keep the investment passive and does not intend to continue controlling the company.

But Wall Street has already begun to speculate that Mr. Musk could change the status of his investment, continue to buy shares of Twitter or even try to take over the company directly.

“We would expect this passive stake as just the beginning of broader discussions with Twitter’s board / board that could ultimately lead to an active stake and a potentially more aggressive Twitter ownership role,” said Daniel Ives, an analyst at Wedbush Securities. Monday morning.

Steven Davidoff Solomon, a professor at the University of California Law School, Berkeley, said the application allows Mr. Musk to “somehow hide any intentions he may have regarding Twitter.” But, he added, applying as a “passive investor” with the real intention of establishing control by changing the type of application is “fraudulent”, although it is rarely processed and difficult to prove.

A long and complicated personal relationship Mr. Muska with Twitter has already got him in trouble, and his tweets about Tesla’s finances have resulted in legal disputes with the SEC

If Mr. Musk is pushing for change on Twitter, he won’t be the first troubled investor the company has faced. Activist firm Elliott Management took a position on Twitter and called for Mr. Dorsey’s removal in 2020. It later struck a deal with Twitter that included a $ 1 billion investment from private investment firm Silver Lake and brought in new board members, including Silver Lake co-CEO Egon Durban. Silver Lake has teamed up with Mr. The man in his efforts to separate Tesla.

Musk’s list of other business ventures is long. In addition to Tesla and SpaceX, he is the founder of Boring Company, a tunnel construction services company. Adding a role to the list could annoy Tesla shareholders. In the last two months of last year, Mr. Musk sold about $ 16 billion worth of Tesla shares, the equivalent of about 10 percent of its stake in the electric vehicle company.

Leaders who mixed media projects with other private ventures sometimes found themselves on the hair of politicians. Former President Donald J. Trump, for example, had a vague opinion of Amazon because he disagreed with reporting in The Washington Post, which Jeff Bezos bought in 2013. Tesla is a big user of environmental loans, while SpaceX monitors government contracts.

For Mr. Musk, the investment could also increase the amount of noise he faces on Twitter. As early as Monday, Twitter users flooded the billionaire with requests for an edit button on the social network and asked him to return certain banned accounts.

Adam Satariano, Jack Ewing i Peter Eavis contributed to reporting.

Leave a Comment

Your email address will not be published.