Elon Musk Becomes Twitter’s Highest Shareholder with 9.2% Total Stake

Quite early in April 2022, Tesla chief, Elon Musk revealed a 9.2 per cent stake in Twitter Inc, worth nearly $US3 billion ($4 billion), making him the micro-blogging site’s largest shareholder and triggering a more than 25 per cent rise in the company’s shares. According to the SEC filing, Musk acquired the Twitter shares on March 14 — which was prior to his commentary about Twitter not being fully committed to free speech.

This was an indirect but emphatic move, following his recent tweet that he was giving a “serious thought” to building a new social media platform, while questioning Twitter’s commitment to free speech.

Just like former U.S president, Donald J. Trump, Elon is a prolific Twitter user, with over 80 million followers since joining the microblogging site in 2009 and has used the platform to make several direct and indirect announcements, including influencing the cryptocurrency and Bitcoin market and teaser about taking Tesla private, which landed him in regulatory crosshairs.

Of late, however, the world’s richest person has been critical of the social media platform and its policies, and recently ran a Twitter poll asking users if they believed the platform adheres to the principle of free speech, to which over 70 per cent voted “no”.

Recently, Elon Musk has made clear his displeasure in the algorithm and policies of Twitter and created an opinion poll where he tried to hazard the opinion of users concerning Twitter’s adherence to the principle of free speech, with the majority of voters voting against the social media platform.

The not-so-good recent quarterly results published Twitter Inc and a lower-than-expected user additions have got investors and users thinking about its growth prospects, even as the company is working on big projects such as audio chat rooms and newsletters to help them reclaim a fair share of the social media industry and end long-running stagnation.

“It does send a message to Twitter … having a meaningful stake in the company will keep them on their toes, because that passive stake could very quickly become an active stake,” said Thomas Hayes, managing member at Great Hill Capital LLC.

With a net worth of about $300 billion according to Forbes, Elon Musk has already sold $16.4 billion worth of his Tesla shares since November 2021, when he announced that he would be offloading 10% of his Tesla holding.

On Monday, April 4, a regulatory filing showed that Musk now owns 73.5 million Twitter shares, about 9.2% of Twitter shares, held by the Elon Musk Revocable Trust, of which he is the sole trustee. Vanguard and Morgan Stanley – an investment banking company, are Twitter’s second and third-biggest shareholders, with an 8.8% and 8.4% stakes respectfully, according to Refinitiv data.

“Musk’s actual investment is a very small percentage of his wealth and an all-out buyout should not be ruled out,” CFRA Research analyst Angelo Zino wrote in a client note.

Elon Musk has made early-stage investments in multiple companies, including online payment processor Stripe Inc and artificial intelligence firm Vicarious, but his latest investment would be the first of its kind.

Musk is also the founder and CEO of SpaceX, brain-chip startup; Neuralink and infrastructure firm; The Boring Company.

Dorsey, who owns a more than 2 per cent stake in Twitter, stepped down as CEO and chairman in November last year, handing over the reins to company veteran Parag Agrawal. He did this in a bid to concentrate as the leader and CEO of Block Inc – a financial payment company (formerly Square), of which he is also a co-founder.

It was surprising to see Twitter shares, which had fallen 38 per cent in the past 12 months through Friday close, trading at $US47.19. The company’s market capitalization increased by $8.38 billion, with current stands at $39.3 billion.

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