Elon Musk Buys 9.2% Stake In Twitter

Synopsis – Elon Musk, the world’s richest man, who is known for his unconventional behavior and equally eccentric tweets has paid $2.89 bn for the stake at Twitter’s closing share price on Friday. After this, Musk now owns 73,486,938 shares of Twitter and this was revealed after he gave the hint that he might shake up the social media industry.

Chief Executive Officer of Tesla, Elon Musk on Monday has surprised everyone by becoming the biggest shareholder of Twitter as per the US Securities and Exchange Commission. Musk took a 9.2% stake in Twitter Inc. and thus the shares of Twitter climbed 26 percent in premarket trading. According to Twitter’s last closed calculations, the stake is worth $2.8 billion. 

Elon Musk, the world’s richest man, who is known for his unconventional behavior and equally eccentric tweets has paid $2.89bn for the stake at Twitter’s closing share price on Friday. After this, Musk now owns 73,486,938 shares of Twitter and this was revealed after he gave the hint that he might shake up the social media industry. Last month he polled on Twitter asking his 80 million followers whether the company adheres to the principles of free speech. To which 70 percent of the users voted no and in its reaction, he asked whether the audience needs a new platform as he has already started to think about the same. 

Musk in his tweet asked the people, “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 tweeted last month. “Is a new platform needed?” he asked in the next tweet.

Tom Forte, an analyst at DA Davidson & Co said, 

Given Elon’s prior comments about wanting to start a social media company, I would say it’s possible that he will increase his stake in Twitter or take a controlling interest in the company sometime soon.

As we all know Musk uses Twitter very passionately, but lately, it was seen that he was not happy with the platform and was very critical of the biggest social media platform. However, by doing such a big investment of 73.48 million Elon Musk has become the largest shareholder in the firm, which is even more than Jack Dorsey, founder of Twitter. 

On the other hand, after this announcement a major test is awaited for CEO Parag Agrawal as he is already thought of increasing accountability, improving product execution, along with making decisions faster. Also, the company is aiming to increase the annual revenue to $7.5 billion and reach its goal of getting315 million daily by the end of 2023. 

Dan Ives, an analyst at Wedbush Securities also said, 

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.”

Earlier this year in January, Musk opposed the new feature of Twitter which allows premium users to show off their non-fungible token (NFT) along with their profile picture. Regarding this Musk said in his tweet “this is annoying” and also said that by adding this feature social media giant is not doing right.