By John Ikani
Elon Musk has taken a 9.2% stake in Twitter Inc. to become the platform’s biggest shareholder, a week after hinting he might shake up the social media industry.
The boss of Tesla and SpaceX, who with more than 80 million followers ranks in the top 10 most popular Twitter users globally, paid $2.89bn for the stake at Twitter’s closing share price on Friday.
Shares in the microblogging site soared as much as 26% in pre-market trading on the back of the news, adding more than $8bn to its $31.5bn market value before Musk’s interest was made public. After the stock price jump Musk’s shares are now worth about $3.6bn.
The stake makes him one of the largest shareholders in the company and is more than four times the 2.25% holding of Twitter founder Jack Dorsey.
Musk’s filing to the US Securities and Exchange Commission (SEC) on Monday did not disclose the purpose of the purchase or any plans for the company. But he has been a high-profile critic of Twitter policies in the past. Last month he said he was giving “serious thought” to creating a new social media platform.
“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. “What should be done?”
Notwithstanding, he regularly uses Twitter to share updates from the companies he owns – including SpaceX and Neuralink. He is also known for sharing memes, adding to his popularity among fans.
Analysts believe the shareholding taken by Musk, who has been highly critical of Twitter, is likely to result in him taking an active interest in the microblogging site that could lead to a buyout.
“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,” said Dan Ives, an analyst at Wedbush Securities.
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