Elon Musk becomes the largest shareholder on Twitter

When Elon Musk was considering taking Tesla privately in 2018, he posted on Twitter to tell the world about it. When he got stuck in traffic in 2016, he tweets the idea of ​​an underground tunnel system to alleviate congestion that “destroys the soul.” And when he challenged Russian President Vladimir Putin to a one-on-one battle last month, he did broadcast it on Twitter.

Now Mr. Musk is putting his money where he says it is.

On Monday, regulatory documents in the Securities and Exchange Commission revealed that Mr. Musk, the billionaire, CEO of Tesla and SpaceX and the richest man in the world, bought a 9.2% stake in Twitter, the social media platform , where there are over 80 million followers. It appears that the purchase will make Mr Musk the largest shareholder on Twitter, ahead of the 8.8 per cent stake held by the mutual fund company Vanguard and surpass the 2.3 per cent stake of Jack Dorsey, the former CEO of Vanguard. Twitter.

Mr Musk’s Twitter investment, which he has been accumulating since at least last month, was worth about $ 2.89 billion, based on the closing price of the company’s shares on Friday. But by the end of Monday, after news of his buy-in caused Twitter’s share price to rise by more than 27 percent, it was worth about $ 3.7 billion. The shares are part of Mr. Musk’s net worth of more than $ 270 billion.

Despite his tendency to share everything on Twitter – from business ideas, insults and memes to last weekend, his experience at a famous nightclub in Berlin – Mr. Musk was unusually a mother to buy shares in the company, at least initially.

“Oh, hello, haha,” he said tweets on Monday, without giving details after news of his investment spread on Twitter. Mr Musk, 50, did not respond to a request for comment. Twitter declined to comment.

Mr Musk bought Twitter at a delicate time for the San Francisco-based company. Mr Dorsey stepped down as CEO in November and plans to leave the company’s board when his term expires this year, after facing an activist shareholder and battling criticism from lawmakers and regulators over freedom of expression. , censorship and toxic content.

Mr Dorsey handed over the reins to Parag Agraval, Twitter’s chief technology officer, who has a lower profile in Silicon Valley than Mr Dorsey. Mr. Agraval reorganized the company’s executive ranks. He is also very interested in a “decentralized” version of Twitter, one of Mr. Dorsey’s latest pet projects at the company.

As part of this effort, Twitter will transfer online power to its users and challenge giants such as Meta, owner of Facebook and Instagram. Twitter is funding independent efforts to build a so-called open social media protocol by weaving cryptocurrency into its app and opening up to developers who want to build custom features for Twitter.

What exactly Mr. Musk plans to do with his Twitter share is not clear. In recent weeks, he has criticized the company for failing to adhere to the principles of free speech and argued that users should be allowed to choose the algorithms that choose the tweets they see or create their own instead of relying on Twitter. for curator of publications.

The idea is one that Mr Dorsey supported while running Twitter. “The choice of which algorithm to use (or not) should be open to everyone,” he said last month in response to a tweet from Mr Musk, who called for algorithms that outsiders could build for the platform.

It is unclear whether Mr Musk will ask – or will be invited – to join the Twitter board. He submitted a securities document called 13G filing, which shows that he plans to keep the investment passive and does not intend to exercise control over the company.

But Wall Street has already begun to speculate that Mr Musk may change the status of his investment, continue to buy shares on Twitter or even try to acquire the company directly.

“We would expect this passive bet as just the beginning of wider talks with Twitter’s board / management, which could eventually lead to an active share and potentially more aggressive ownership role on Twitter,” said Daniel Ives, an analyst at Twitter. Wedbush Securities. Monday morning.

Stephen Davidoff Solomon, a law professor at the University of California, Berkeley, said the documentation allowed Mr Musk to “somehow hide any intentions regarding Twitter”. But, he added, submitting documents as a “passive investor” with a real intention to insist on control by changing the types of documents is “fraudulent”, although it is rarely prosecuted and difficult to prove.

Mr Musk’s long and complicated personal relationship with Twitter has already gotten him into trouble, with his tweets about Tesla’s finances leading to legal disputes with the SEC

If Mr Musk insists on a change on Twitter, he will not be the first excited investor the company has to contend with. Activist firm Elliott Management took a position on Twitter and called for Mr Dorsey’s removal in 2020. It later struck a deal with Twitter, which included a $ 1 billion investment from private investment firm Silver Lake and attracted new board members, including Silver Lake co-CEO Egon Durban. Silver Lake teamed up with Mr. Musk in his efforts to make Tesla private.

Mr Musk’s list of other business ventures is long. In addition to Tesla and SpaceX, he is the founder of Boring Company, a tunnel construction company. Adding a role to the list could irritate Tesla shareholders. In the last two months of last year, Mr. Musk sold about $ 16 billion in shares to Tesla, equivalent to approximately 10 percent of his stake in the electric vehicle company.

Leaders who have combined media projects with other private ventures sometimes find themselves in the hair of politicians. Former President Donald J. Trump, for example, looked grim on Amazon because he disagreed with the coverage of The Washington Post, which Jeff Bezos bought in 2013. Tesla is a big beneficiary of environmental loans, while SpaceX is pursuing government contracts.

For Mr Musk, the investment could also increase the noise he faces on Twitter. As early as Monday, Twitter users flooded the billionaire with requests for an edit button on the social media service and asked him to restore certain banned accounts.

Adam Satariano, Jack Ewing and Peter Ivis contributed to the reporting.

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