Elon Musk has become one of the biggest shareholders in Twitter, just a week after he posted on the platform saying he was giving “serious thought” to building a new social media company.
A filing disclosed on Monday by the US Securities and Exchange Commission (SEC) revealed that the chief executive of electric car maker Tesla had taken a passive 9.2 per cent stake, worth $2.9bn
In pre-market trading in New York, Twitter’s shares were up $9.59 — more than 24 per cent — at $48.90.
Musk did not immediately make any statement about his reasons for buying the shares. Twitter did not immediately respond to a request for comment.
Musk is a frequent user of Twitter, with more than 80mn followers, but in recent weeks he has shown scepticism about how it is used and designed.
He used a poll last month to ask followers if Twitter “rigorously adheres” to the principle of free speech being essential to a functioning democracy, adding that “the consequences of this poll will be important”. More than 70 per cent of respondents said no.
Free speech is essential to a functioning democracy.
Do you believe Twitter rigorously adheres to this principle?
— Elon Musk (@elonmusk) March 25, 2022
When asked by a Twitter user if he would consider setting up his own social media platform which prioritised free speech, Musk replied that he was “giving serious thought” to the idea.
Another poll was conducted by Musk asking whether Twitter’s algorithm should be open-source, meaning anyone can review the original source code behind it. Twitter’s former chief Jack Dorsey, who resigned in November, replied: “The choice of which algorithm to use (or not) should be open to everyone.”
“It looks like Elon has his eyes laser-set on Twitter and we would expect this passive stake as just the start of broader conversations with the Twitter management that could ultimately lead to an active stake and a potential more aggressive ownership role of Twitter,” said Wedbush analyst Daniel Ives in a note.
The entrepreneur’s use of Twitter has often proved contentious in the past when he has used it to make statements about Tesla’s financial health.
A 2018 tweet, in which Musk said he had the “funding secured” to take the company private, led to an SEC penalty and settlement including a provision that a company lawyer pre-approve posts about Tesla’s finances.
The SEC subsequently subpoenaed Musk in February, after a Twitter poll in November, in which he asked whether he should sell 10 per cent of his stake in Tesla.
Musk is seeking to quash the requirement for an overview of his tweets. A filing on behalf of the chief executive last week quoted the rapper Eminem, saying: “The (SEC) won’t let me be or let me be me so let me see; They tried to shut me down . . . ”
In an interview with the Financial Times late last year, Musk said: “I feel like Tesla has been unfairly targeted over and over again by the SEC. From what I can see, they’ve done nothing to protect investors, small or large, from Wall Street short sellers.”
