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April 13, 2023
Tesla owner Elon Musk has taken an almost $3 billion (£2.3 billion) stake in Twitter to become the social media platform’s largest shareholder.
Must now has a 9.2% stake in Twitter, according to filings made to the US Securities and Exchange Commission (SEC) on Monday.
Twitter’s shares increased by over 25% in pre-market trading on the back of the news, adding about $8 billion to its $31.5 billion value, before easing back to 21% up in early trading. After the stock price jump Musk’s shares are now worth more than $3.5bn.
Musk’s filing did not disclose the purpose of the purchase or any plans for the company. But he has been a high-profile critic of Twitter policies in the past. Last month he said he was giving “serious thought” to creating a new social media platform.
“Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy,” Musk tweeted last month. “What should be done?”
Whenever an investor buys 5% or more of a company’s shares, they must disclose the purchase in filings with the Securities and Exchange Commission. Although a stake of less than 10% in a company is considered “passive” in the eyes of Wall Street.
“I think he intends to go active and force change at Twitter,” said Dan Ives, tech analyst as Wedbush Securities. “This is a shot across the bow at Twitter’s board and management team to start discussions.”
Even if Musk doesn’t try to change the way Twitter operates, his large purchase could prompt some other activist investors to take a stake in the company, Ives said. “One way or another, he’s going to change the course of Twitter,” Ives said.
ARTICLE: PAUL MURDOCH
MANAGING EDITOR: CARSON CHOATE
PHOTO CREDITS: GWINNETT DAILY POST