How did Elon Musk become the largest Twitter shareholder?
The world’s richest man and Tesla’s CEO, Elon Musk, bought about 73.5 million Twitter shares at about $2.89 billion, based on Friday’s market closing price.
Elon’s shares give him a 9.2% stake in Twitter, topping the 8.8% stake of the former largest Twitter shareholder, the Vanguard Group. This makes Elon Twitter’s largest single shareholder.
Musk’s purchase comes a week after he hinted at entering the social media space and making major changes.
Elon Musk is a major Twitter user known for making controversial tweets and for criticizing social media companies.
Eventually, Musk asked his 80 million followers in a Twitter poll if the platform adheres to the principles of free speech.
Musk tweeted, “Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?”
More than 2 million of Musk’s Twitter followers voted in the poll. However, 70% of them voted “No”.
Furthermore, Musk asked if a new platform was needed as he is considering starting his own.
“Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?” He tweeted. “Is a new platform needed?”.
Consequently, it wasn’t much of a surprise when the news of Elon buying a stake in Twitter became public.
Twitter stocks and shares rose by about 26% in pre-market trading following the news of Elon’s purchase.
Elon’s move also poses a challenge to new Twitter CEO, Parag Agrawal. Agrawal took over the office in November 2021 after former CEO and co-founder Jack Dorsey unexpectedly resigned.
Wedbush analysts, Daniel Ives and John Katsingris wrote in a note, “We would expect this passive stake as just the start of broader conversations with the Twitter board/management that could ultimately lead to an active stake and a potential more aggressive ownership role of Twitter.”
Do you also think Elon Musk will seek out active positions in Twitter? Well, Time will tell.