Twitter soars as Musk buys
Twitter’s share price rose by 27% after Elon Musk became its largest shareholder – then promptly joined the board. Matthew Partridge reports
Shares in Twitter rose by 27% in a day – the most since it listed in 2013 – after a filing revealed that Elon Musk had spent $2.9bn to buy a 9.2% stake in the company, says Callum Jones in The Times, making him its biggest shareholder. Musk is a “prolific” user of the microblogging service, with 80 million followers, but has recently claimed that he was giving “serious thought” to developing a rival platform. The unexpected investment will broaden a corporate empire that already spans cars (Tesla) and rockets (SpaceX).
The news of Musk’s stake sparked speculation as to his intentions, with attention falling on somewhat arcane details, such as the decision to disclose his stake via a 13G form, which denotes an investor who plans to be passive, rather than a 13D, used by activist investors. That was cleared up rapidly when Musk took a seat on the board and refiled his paperwork, using the 13D this time. The move “ends the possibility of Musk mounting a takeover... capping his ownership at 14.9%”, notes Jillian Ward on Bloomberg.
Musk’s move seems to be motivated by his “clear and long-standing interest in defending freedom of speech on the platform” rather than “conventional concerns about return on investment or profitability”, says Gareth Corfield in The Daily Telegraph. He “enjoyed a close working relationship with Twitter’s founder Jack Dorsey”, but Dorsey’s successor Parag Agrawal has been criticised by some for being more open to increased moderation of comments.
A welcome intervention
Musk has “picked his moment carefully”, notes Elaine Moore of Lex in the Financial Times. Until his intervention, Twitter’s share price had fallen by 40% over the past year. He may well be welcomed by shareholders concerned about how Twitter – “far from the largest social network”, despite its notoriety – is doing against rivals such as Snapchat. And he is already throwing his weight around, says Jon Porter on The Verge.
This week he posted a tweet polling his 80 million followers about “whether they’d like to be able to edit their tweets after posting them”. The poll – on what has been “one of the most commonly requested features of the social-media platform” – was retweeted by Agrawal, and was followed by confirmation that the company has in fact “been working on an edit feature since last year”, which it will soon be testing on its Twitter Blue subscription service.
If Musk is genuinely a “man on a mission” to make sure Twitter “rigorously adheres” to principles of free speech it could be bad news for Tesla’s shareholders, says Nils Pratley in The Guardian. Their hearts “must sink every time Elon Musk takes on another pet project”, especially one with the “potential to become a serious distraction from the day job”. While his high profile “has saved the company a fortune in advertising dollars”, it’s hard “to see any upside” for Tesla if Musk “gets sucked into toxic battles over social media’s role” in US politics.