Elon Musk has taken a 9.2 percent stake in Twitter Inc to become the platform’s biggest shareholder, a week after hinting he might shake up the social media industry.
Twitter shares surged about 26 percent in premarket trading after Musk’s purchase was revealed yesterday in a regulatory filing. The stake is worth about US$2.89 billion, based on Friday’s market close.
Musk, 50, polled his more than 80 million followers on Twitter last month, asking them whether the company adheres to the principles of free speech.
Photo: Reuters
After more than 70 percent said no, he asked whether a new platform was needed and said he was giving serious thought to starting his own.
Musk has been one of the biggest personalities on Twitter and has regularly run into trouble on the platform. The Tesla Inc chief executive officer is seeking to exit a 2018 deal with the US Securities and Exchange Commission that put controls in place related to his posting about the electric-vehicle maker.
The announcement would be yet another major test for new Twitter CEO Parag Agrawal, who replaced Jack Dorsey after he unexpectedly resigned in November last year.
Agrawal vowed to increase accountability, make decisions faster and to improve product execution. The company set ambitious goals for growth including increasing annual revenue to US$7.5 billion and reaching 315 million daily users by the end of next year.
Musk posted a cryptic meme in December last year after Twitter announced that Agrawal was taking over from Dorsey as Twitter’s CEO. It depicted Agrawal as former Soviet leader Joseph Stalin and Dorsey as Soviet secret police head Nikolai Yezhov being shoved into water.
“It looks like Elon has his eyes laser set on Twitter,” Wedbush Securities Inc analyst Dan Ives said in a research note, adding that the stake could lead to a “more aggressive ownership role.”
It is unclear what Musk is planning with his stake. The filing with the SEC shows that the date of the event that triggered the disclosure was March 14. The type of form used often indicates the investor is not seeking to acquire control of a company, or to influence who controls it.
Musk, already the world’s richest person according to the Bloomberg Billionaires Index, has made about US$1.1 billion since the middle of last month, based on the pop in Twitter’s shares in early trading yesterday.
Twitter is under pressure to move faster in building new products. The company has set ambitious revenue and user growth goals to convince skeptical investors that it was serious about expanding its business. While Twitter has grown steadily for years, its stock gains have lagged behind industry peers.
Musk has lambasted Twitter’s development of profile pictures linked to non-fungible tokens, saying the social media company has the wrong priorities.
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