Tesla Inc top boss Elon Musk revealed a 9.2% stake in Twitter Inc, likely making him the biggest shareholder in the micro-blogging site and triggering a 23% rise in its shares. Musk’s move comes close on the heels of his tweet that he was giving a serious thought to building a new social media platform.
A filing showed that Musk owns 73.5 million Twitter shares. This values his passive stake in the company at up to $2.9 billion based on the stock’s close. The shares are held by the Elon Musk Revocable Trust, of which he is the sole trustee. A prolific Twitter user, Musk has over 80 million followers since joining the site in 2009. It has used the platform to make several announcements, including teasing a go-private deal for Tesla that landed him in regulatory scrutiny. He has been critical of the social media platform and its policies, saying the company is undermining democracy by failing to adhere to free-speech principles.
Wedbush analyst Dan Ives wrote in a note that they 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. Musk has been selling his stake in Tesla since November. He said that he would offload 10% of his holding in the electric-car maker. He has already sold $16.4 billion worth of shares since then. Twitter was the target of activist investor Elliott Management Corp in 2020. The hedge fund argued its then-boss and co-founder, Jack Dorsey, was paying too little attention to Twitter while also running Square.
Dorsey stepped down as CEO and chairman in November. But continues to own a 2.25% stake in the company that makes him the sixth biggest shareholder. Meanwhile, Musk and Dorsey have found some common ground in dismissing the so-called Web3, a vague term for a utopian version of the internet that is decentralized. Shares of other social media firms, including Meta Platforms and Snapchat owner Snap Inc, were also trading higher on the news.