Elon Musk becomes the highest Twitter shareholder, acquires a 9% stake

Elon Musk, the CEO of Tesla Inc (TSLA.O), has purchased a 9.2 percent stake in Twitter for roughly $3 billion, making him the company’s largest stakeholder.

The action comes after he tweeted that he was “seriously considering” creating a new social media platform and questioned Twitter’s commitment to free expression.

Musk holds 73.5 million Twitter shares, according to a regulatory filing on Monday, which are held by the Elon Musk Revocable Trust, of which he is the sole trustee.

Twitter’s stock jumped 27.1 percent to $49.97 on Monday after the news was announced. On Monday, the stock added $8.38 billion to its market capitalization, which now stands at $39.3 billion, after falling 38 percent in the previous 12 months through Friday’s closing.

According to Ryan Jacob, chief executive officer of Jacob Asset Management, an investment in Twitter is more likely to result in favorable than negative results for shareholders, and Twitter is one of the fund’s major assets.

However, in recent months, the world’s wealthiest man has been critical of the social media platform and its practices, and recently conducted a Twitter survey asking users if they believe the network adheres to the idea of free expression, to which more than 70% responded “no.”

“It does send a message to Twitter,” Thomas Hayes, managing member of Great Hill Capital LLC, said. “Having a big investment in the company will keep them on their toes, since that passive stake could very easily become an active stake.”

Musk also created a poll asking Twitter users if they desire a feature that the social media network has been working on: an edit button.

Since joining Twitter in 2009, Musk has amassed over 80 million followers and has used the network to make major announcements.

Musk has previously invested in startups such as Stripe Inc, an online payment processor, and Vicarious, an artificial intelligence firm.

He is also the founder and CEO of SpaceX, as well as the CEO of Neuralink, a brain-chip startup, and the Boring Company, an infrastructure firm.

In 2020, activist investor Elliott Management Corp targeted Twitter, claiming that the company’s then-CEO and co-founder, Jack Dorsey, was paying too little attention to Twitter while simultaneously overseeing what was then known as Square Inc. (SQ.N). Dorsey, who owns a stake of more than 2% in Twitter, stepped down as CEO and chairman in November last year, handing the reins to company veteran Parag Agrawal.