What was Elon Musk thinking in loading up on Twitter stocks, with 73.5 million shares, worth $2.64 billion?
Until recently, the Tesla and SpaceX chief had declared his intent to build his own social platform, apparently to rival Twitter. Now the narrative has changed: if you can’t beat them join them.
Which is just what Musk did. On Monday (April 4, 2022), the world’s richest businessman pulled off a surprise when a mandatory regulatory filing showed he already bought a 9.2-per cent stake in the microblogging site.
Speculators sent Twitter shares soaring, topping 27%. What does this all mean? We break it down for you:
How much did Musk actually invest in Twitter?
According to a SEC 13G filing released on April 4, 2022, Musk now owns 73,486,938 shares of Twitter. This represents a 9.2% “passive stake” in the company.
Did he make money on that investment?
Based on Friday’s (April 1) closing, the stake is worth $2.89 billion. The value jumped to about $3.7 billion based on Wednesday’s (April 6, 2022) opening price of $50.98 per share.
Will Musk now become the CEO of Twitter, too?
Musk already has his hands full at electric vehicle maker Tesla and rocket company Space X, as well as with The Boring Co. and Neuralink. He doesn’t necessarily need to become CEO of Twitter. Based on his previous posts, however, it appears Musk wants to see some changes in the company’s practices.
When did Musk actually buy the Twitter shares?
It’s emerged he’s been buying Twitter shares on almost a daily basis since the end of January — spending $2.64 billion for his stake in the company, according to the SEC filing.
Twitter shares jumped 27% after news of Musk’s stake in the social media company emerged. His stake rose by $1.06 billion in value from Friday’s close.
What happened to Twitter’s original CEO?
Twitter’s founder, Jack Dorsey, stepped down as CEO in November 2021. It was an unexpected move, with no prior notice about the leadership change. Dorsey was succeeded by Parag Agrawal, who until then had been the company’s chief technology officer. Dorsey is still part of Twitter’s board, and is expected to leave the board in May.
What did Musk say about Parag Agrawal?
Musk had expressed support for Dorsey in the past. When Agrawal was first named Twitter CEO, someone else tweeted the fact that Google, Microsoft, Adobe, IBM, Palo Alto Networks and Twitter are all run by executives who grew up in India, Musk replied with his own tweet: "USA benefits greatly from Indian talent!"
Days later, however, Musk depicted both Dorsey and Agrawal in an unflattering meme on Twitter. Musk made it obvious: he desires some changes. On Tuesday (April 5, 2022) Agrawal welcomed Elon in a post, announcing that the Tesla CEO is joing Twitter's board.
How much stake does Twitter founder Jack Dorsey own in the company?
Jack Dorsey owns 2.3% share of Twitter, a company he founded in 2006. Musk, for his part owns more than 20% of Tesla, which he co-founded in 2003.
Recently, Musk posted a tongue-in-cheek poll — replete with what appears to be deliberate typos. More than 4 million people voted in the poll, with “Yse” getting the majority of votes.
Now Twitter said its working on an edit button, but says the idea didn’t come from Musk.
Musk, with 80 million Twitter followers (more than any other CEO) frequently uses tweeter to disseminate news about Tesla, SpaceX, The Boring Co & Neuralink. These companies have no PR or advertising team normally found in other companies.
What happens if Musk pushes for changes in Twitter?
Musk is not the only passionate investor Twitter has had to deal with. In 2020, Elliott Management, an activist investment firm, took a position in Twitter and demanded Dorsey’s removal.
This led to a $1 billion investment from Silver Lake, the addition of board members, including Silver Lake’s co-chief executive, Egon Durban. Silver Lake teamed up with Musk in his efforts to take Tesla “private”, which never happened.
Musk has already gotten himself in trouble for his tweets about Tesla’s finances, which led the SEC to slap Musk and Tesla each with a $20 million penalty.
He recently questioned Twitter’s dedication to free speech. "Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy," Musk tweeted last month.
To this day, Musk's ultimate aim for his 73.5-million share purchase cannot be known for certain. The SEC filing did not disclose his purpose nor his plans for the company.
Even if no notable tweaks happen immediately in the way the microblogging site operates, it’s possible other activist investors could take a stake to have their own say in the company. But Musk has, without a doubt, now become part of the dramatis personae in Twitter’s story.
Net worth: $235 billion
In January 2021, Musk became the world’s richest businessman, overtaking Jeff Bezos of Amazon. Today, his personal worth is estimated at $235 billion.
