The eccentric tycoon acquired nearly 10% of the social network’s shares.
In late March, Silicon Valley billionaire Elon Musk stated he was seriously considering creating a new social media platform. However, the Tesla Inc. founder decided instead to become a major shareholder in Twitter. Musk acquired a 9.2% stake in the company, according to a filing with the U.S. Securities and Exchange Commission (SEC) on Monday. This stake is more than four times the size of the 2.25% holding maintained by Jack Dorsey, the social network’s founder.
The SEC filing indicates that he owns 73.5 million Twitter shares through his trust, the Elon Musk Revocable Trust, though no details regarding the dates or prices of the acquisition were provided. With this move, Elon Musk becomes Twitter’s largest shareholder, surpassing the Vanguard Group (8.79%) and Morgan Stanley (8.76%).
Last week, he had hinted at the possibility of creating a new social media platform. Responding to a Twitter user, he emphasized the idea of a social network featuring an open-source algorithm that prioritized free speech and minimized propaganda. Musk, a prolific Twitter user, has recently been critical of the social media platform and its policies, stating that the company undermines democracy by failing to adhere to free speech principles.
Ultimately, however, he disclosed the purchase of a stake valued at approximately $2.9 billion based on last Friday’s closing price of $39.31 per share. Following the news, the social network’s stock surged in pre-market trading; early data shows shares rising as much as 26% to reach $47. “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?” Musk said in a tweet posted two weeks ago. With this move, Elon Musk becomes Twitter’s largest shareholder, surpassing the Vanguard Group (8.79%) and Morgan Stanley (8.76%).
Musk’s aggressive move on Twitter stock comes amidst SEC scrutiny regarding his social media activity, which could potentially constitute securities manipulation and conflicts of interest.
The billionaire previously faced legal action over an August 2018 tweet in which he claimed to have “funding secured” to take Tesla private at $420 per share—a statement that turned out to be untrue but caused the electric carmaker’s stock price to surge. Musk reached a settlement with the SEC involving a multi-million dollar fine and his removal as the company’s chairman, though he remained the group’s CEO.
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