Yahoo Finance Elon Musk buys 9.2% Twitter stake to become top shareholder
With 80 million followers, Elon Musk is one of the most sought-after people on Twitter, and now he is officially one of the largest shareholders in the social media platform.
The Tesla and SpaceX CEO has reported a passive stake of 9.2 per cent in Twitter, as per a US Securities and Exchange Commission (SEC) filing on April 4, 2022.
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Twitter Inc. (TWTR) has disclosed that the billionaire owns 73.5 million Twitter shares in his personal capacity.
The stake is worth $3.83 billion, based on Twitter's closing price on Friday last week.
Following the report, Twitter shares - which have fallen 38 per cent in the past 12 months - soared by as much as 26 per cent.
The company added about $11.11 billion to its market capitalisation, which now stands at $52 billion. according to Reuters.
Shares of Tesla (TSLA) also rose marginally, according to Associated Press.
While this investment makes Musk a larger shareholder than co-founder and ex CEO Jack Dorsey (who holds a 2.25 per cent stake), Musk's stake is a passive investment. This means he will play no active role in the running of Twitter.
According to Refinitiv, Vanguard is Twitter's second-biggest shareholder, with an 8.79 per cent stake.
Last month, Musk posted a tweet, questioning the scope of free speech on Twitter and followed it up with a poll on whether a new platform was needed to encourage it.
He also said he was giving "serious thought" to creating a new social media platform in a separate tweet.
Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy.
What should be done? https://t.co/aPS9ycji37— Elon Musk (@elonmusk) March 26, 2022
Is a new platform needed?
— Elon Musk (@elonmusk) March 26, 2022
The SEC filing comes close on the heels of these tweets, which could perhaps be an indication the passive stake could soon become an active one, Thomas Hayes, managing member at Great Hill Capital LLC, told Reuters.
Musk has already been at loggerheads with regulators about his Twitter use.
Last month, he asked a federal judge to nullify a subpoena from securities regulators and do away with a 2018 court agreement, according to which he was required to have his posts on Twitter pre-approved by a corporate lawyer.
US regulators said they had legal authority to subpoena Musk and Tesla about his tweets, and that his request was not valid.
Musk’s revelation about his stake in Twitter comes two days after Tesla Inc. posted dull first-quarter production numbers.
Though the company delivered 310,000 vehicles during this period, it fell short of expectations.
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