Elon Musk, the CEO of Tesla and SpaceX, has invested in Twitter Inc. after declaring that he is “considering” creating a new social media platform that promotes free speech. According to one analyst, this might eventually result in a buyout.
Elon Musk’s Twitter Investment:
On Monday, Elon Musk disclosed a 9.2% ownership in Twitter Inc., filing with the US Securities and Exchange Commission (SEC).
According to the SEC filing, the Elon Musk Revocable Trust, of which the Tesla CEO is the only trustee, currently owns 73,486,938 shares of Twitter, representing 9.2 per cent of the company’s common stock, based on 800,641,166 shares outstanding as of Feb. 10. Based on Twitter’s closing price on Friday, the stake is worth $2.89 billion.
Musk’s investment in the social media behemoth comes a little over a week after stating that he is “considering” developing a new social media platform that prioritizes free speech.
Musk, a frequent Twitter user, also set up a poll on the platform, asking his 80 million followers if they thought Twitter strictly adhered to the free speech principle. The Tesla boss hinted that the consequences of the poll “will be important.” Over two million votes were counted, and 70.4 per cent said no.
Musk has become Twitter’s largest shareholder, with a 9.2 per cent stake. In comparison, Twitter founder Jack Dorsey, who stepped down as CEO last year, owns a 2.25 per cent share in the firm.
While Musk’s investment in Twitter is regarded as a passive one, investors are confident that it will lead to more, and Twitter’s stock has risen more than 25% in pre-market trading.
Dan Ives, a Wedbush analyst, told CNBC on Monday: Musk might try to strike a more assertive tone on Twitter… This could result in a buyout in the future.
“Given what Musk has been talking about, at least from a social media standpoint,” Ives noted, “this makes sense.” “We would anticipate this passive stake to be just the start of broader conversations with the Twitter board and management that might eventually lead to an active stake and a potential more aggressive ownership role for Twitter,” the analyst wrote in a note.
“Twitter is a $30 billion company,” Paul Hickey, co-founder of Bespoke Investment Group, told CNBC. Elon Musk has a net worth of $300 billion dollars. For him, the stakes aren’t particularly high. I’m thinking about it from the standpoint of a Tesla shareholder. Do you really want him to take his eye off the ball when they’re growing?”
