Musk becomes Twitter’s largest shareholder
Elon Musk, the billionaire CEO of Tesla and the world’s wealthiest person, bought a nearly 10% stake in Twitter, the social media platform where he has more than 80 million followers and shares everything from business ideas and memes to, this past weekend, his experience at a famed Berlin nightclub.
The purchase, made public Monday in a regulatory filing with the Securities and Exchange Commission, is worth about $2.89 billion based on the closing price of Twitter’s stock Friday. News of Musk’s buy-in sent Twitter share prices soaring.
A spokesperson for Twitter did not immediately respond to messages requesting comment.
The purchase, equal to 9.2% of the company, makes Musk Twitter’s largest shareholder. He has criticized the company in recent weeks for failing in his view to adhere to free speech principles, and he has openly considered starting a social network of his own that would be open source. His long and complicated personal relationship with the platform has also gotten him in trouble, with his tweets about Tesla’s finances resulting in legal wranglings with the SEC.
Some of Musk’s ideas, like moving Twitter to an opensource network, earned 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,” Dorsey said last month in response to a tweet from Musk advocating an opensource algorithm for the platform. Dorsey, who is friendly with Musk, is expected to step down from the Twitter board in May.
It is unclear what Musk’s plans are beyond the large shareholder position and whether he will ask — or be invited — to join Twitter’s board. Musk filed a securities document indicating he planned for the investment to be passive, meaning 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 buying shares or even try to acquire the company outright, The New York Times’ Dealbook newsletter reported.
“We would expect this passive stake as just the start of broader conversations with the Twitter board/management that could ultimately lead to an active stake and a potential more aggressive ownership role of Twitter,” Daniel Ives, an analyst at Wedbush Securities, said Monday morning.
If Musk pushed for change, he would not be the first agitated investor the company has had to contend with in recent years. The activist firm Elliott Management took a position in Twitter and called for Dorsey’s removal in 2020. It later struck a deal with Twitter that included a $1 billion investment from the private equity firm Silver Lake and brought on new board members, including Silver Lake’s CO-CEO, Egon Durban. Silver Lake partnered with Musk in his efforts to take Tesla private
Musk’s list of other business ventures runs long: Beyond Tesla, he is CEO of the rocket company Spacex and founder of The Boring Co., a tunnel construction services company. Adding another role to the list could irk Tesla shareholders. And executives who have juggled media projects with other private endeavors have found themselves in lawmakers’ cross hairs.