Elon Musk, the billionaire CEO of Tesla and the world’s richest person, last weekend bought a nearly 10 percent stake in Twitter, the social media platform where he has more than 80 million followers and shares everything from business ideas and memes to his experience in a famous Berlin nightclub.
The purchase, made public Monday in a regulatory filing with the Securities and Exchange Commission, is valued at approximately $2.89 billion based on Friday’s closing price of Twitter’s stock. The news about the buy-in of Mr. Musk sent stock prices on Twitter soaring.
A Twitter spokesperson did not immediately respond to messages asking for comment.
The purchase, equivalent to 9.2 percent of the company, makes Mr. Musk the largest shareholder in Twitter. He has criticized the company in recent weeks for not adhering to free speech principles, and has openly considered starting its own social network that would be open source. His long and complicated personal relationship with the platform has also gotten him into trouble, with his tweets about Tesla’s finances resulting in legal battles with the SEC.
Some of Mr. Musk’s ideas, such as moving Twitter to an open source network, gained the support of Twitter’s co-founder, Jack Dorsey, who stepped down as chief executive late last year.
“The choice of which algorithm to use (or not) should be open to everyone,” Mr. Dorsey said last month in response to a tweet from Mr. Musk advocating an open-source algorithm for the platform. Mr. Dorsey, who is friends with Mr. Musk, is expected to step down from the Twitter board in May.
It’s unclear what Mr. Musk’s plans are beyond the position of major shareholders and whether he will ask — or be invited — to join Twitter’s board. Mr. Musk has filed a securities document indicating that he intended to make the investment passive, meaning that he does not intend to pursue control of the company. But there was also speculation Monday that he could change the status of his investment, continue to buy stock or even attempt to take over the company entirely, today’s DealBook newsletter reported.
Daniel Ives, an analyst at Wedbush Securities, said on Monday: “We expect this passive stake is just the start of broader discussions with Twitter’s board/management that could eventually lead to an active stake and potentially more aggressive ownership role from Twitter this morning.
If Mr. Musk pushed for change, he wouldn’t be the first excited investor the company has dealt with in recent years. Activist firm Elliott Management took a position on Twitter, calling for Mr. Dorsey’s removal in 2020. It later struck a deal with Twitter that included a $1 billion investment from private equity firm Silver Lake and took on new board members, including Silver Lake’s co-CEO Egon Durban. Silver Lake worked with Mr. Musk in his attempts to take Tesla private
Musk’s list of other business ventures is long: In addition to Tesla, he is chief executive of the rocket company SpaceX and founder of The Boring Company, a tunnel-building services company. Adding another role to the list could annoy Tesla shareholders. And executives who have Googled media projects with other private endeavors have landed in the crosshairs of lawmakers. Former President Donald J. Trump had a dim view of Amazon because he disagreed with the coverage in The Washington Post, which Jeff Bezos owned separately.
Regardless of the potential backlash, Mr. Musk can benefit from the investment. The document detailing Mr Musk’s stake said it was worth about $3 billion at Friday’s closing price. Dated March 14, Twitter’s stock has jumped about 50 percent since then.
This post Elon Musk buys a large stake in Twitter
was original published at “https://www.nytimes.com/2022/04/04/technology/elon-musk-twitter.html”
