Twitter stock rockets as Elon Musk buys stake: what’s next?
14:15, 4 April 2022
Billionaire businessman and Twitter (TWTR) celebrity Elon Musk has taken a stake in the social media outlet, sending shares soaring by 25% in mid-morning US trading on Monday.
A US regulatory filing shows Musk acquired 73.49 million shares of Twitter, equivalent to 9.2% of outstanding shares and worth around $3.6bn (£2.75bn, €3.27) at current prices and making him the largest shareholder.
The size of the stake, combined with Musk’s past comments on Twitter’s policies, prompted speculation that he could be preparing to take an activist role and seek changes to Twitter’s direction or even management.
Last week the billionaire founder of SpaceX and CEO and “Technoking” of Tesla (TSLA) used the social media site to ask about Twitter’s approach to free speech and said he was considering creating a social media platform of his own.
Twitter (TWTR) five-year chart
Twitter
TwitterAnalyst reaction
With the stock price rising, one Wall Street analyst reckons Musk’s move has the potential for an ownership play.
The analyst was not concerned about Musk’s interest in Twitter leading to him "taking his eye off the ball" with Tesla/SpaceX.
“We will be following Musk's comments/future regulatory filings closely to see if Musk ultimately pursues further conversations with the Twitter board and/or goes to an active stake and above the key 10% threshold,” Ives wrote.
As at 11:02 EDT (UTC-5) the stock was up 25% at $49.41 per share.
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Twitter profile
Since signing up on the social media platform in 2009, Musk has gained 80 million followers and is in the top ten of the most-followed people on Twitter.
WikipediaMusk is so closely followed amongst cryptocurrency investors that his crypto-related Tweets are enough to move prices. His Tweets have required pre-approval from the SEC since 2018 after he settled charges with the SEC over old Tweets related to taking Tesla private.
Late last year Musk also turned to Twitter to host a poll asking followers if he should sell 10% of his holdings in Tesla.
TwitterDorsey replacement
In November, Twitter founder and CEO Jack Dorsey stepped down suddenly with 10-year Twitter veteran and chief technology officer Parag Agrawal taking on role of CEO.
Dorsey had been in charge at both Twitter and payments company Block (SQ) (formerly Square), which he also co-founded, but institutional shareholders had been pushing for him to choose one over the other, according to a report from the UK’s Guardian newspaper.
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