Elon Musk becomes Twitter’s largest shareholder

When Elon Musk considered taking Tesla private in 2018, he posted on Twitter telling the world about it. When he got stuck in traffic in 2016, he tweeted the idea of ​​an underground tunnel system to alleviate “soul-destroying” congestion. And when he challenged Russian President Vladimir V. Putin to a one-on-one fight last month, he spread it on Twitter.

Now Mr. Musk is putting his money where he talks.

On Monday, a regulatory filing with the Securities and Exchange Commission revealed that Mr. Musk, the billionaire CEO of Tesla and SpaceX and the richest person in the world, had bought a 9.2% stake in Twitter, the platform. form of social media where he is over 80 years old. million followers. The purchase appears to make Mr Musk the largest shareholder in Twitter, ahead of the 8.8% stake held by mutual fund firm Vanguard and eclipsing the 2.3% stake of Jack Dorsey, the former director General of Twitter.

Mr. Musk’s Twitter investment, which he has been accumulating for at least the past month, was worth about $2.89 billion based on the company’s closing stock price on Friday. But by the end of Monday, after news of his takeover sent Twitter’s share price soaring more than 27%, he was worth around $3.7 billion. The shares are only a fraction of the more than $270 billion net worth claimed by Mr. Musk.

Despite his penchant for sharing everything on Twitter – from business ideas, insults and memes to, last weekend, his experience at a famous Berlin nightclub – Mr. Musk was uncharacteristically quiet about the company’s stock purchase, at least at first.

“Oh hi lol” he tweeted on Monday without giving further details after news of his investment spread on Twitter. Mr. Musk, 50, did not respond to a request for comment. Twitter declined to comment.

Mr. Musk bought Twitter at a tricky time for the San Francisco-based company. Mr Dorsey resigned as chief executive in November and plans to step down from the company’s board at the end of his term this year, after clashing with an activist shareholder and struggling with criticism from lawmakers and regulators regarding free speech, censorship and toxic content.

Mr. Dorsey handed over the reins to Parag Agrawal, Twitter’s chief technology officer, who keeps a lower profile in Silicon Valley than Mr. Dorsey. Mr. Agrawal reorganized the management ranks of the company. He is also deeply interested in a “decentralized” version of Twitter, one of Mr. Dorsey’s latest pet projects at the company.

As part of the effort, Twitter would shift online power into the hands of its users and challenge behemoths like Meta, the owner of Facebook and Instagram. Twitter is funding an independent effort to create a so-called open protocol for social media, integrating cryptocurrency into its app and opening up to developers who want to build custom features for Twitter.

What exactly Mr. Musk plans to do with his participation on Twitter is unclear. He has criticized the company in recent weeks for failing to uphold free speech principles, and he argued that users should be allowed to choose the algorithms that select the tweets they see, or create their own, instead of relying on Twitter. to manage posts.

The idea was one that Mr Dorsey championed while running Twitter. “The choice of which algorithm to use (or not) should be open to everyone,” he said last month in response to a tweet from Mr. Musk clamoring for algorithms outsiders can create for the platform. form.

It’s unclear whether Mr. Musk will ask — or be invited — to join Twitter’s board. He filed a securities document called a 13G filing, stating that he intended the investment to be passive and that he had no intention of taking control of the company.

But Wall Street has already begun to speculate that Mr. Musk could change the status of his investment, continue to buy Twitter shares or even attempt to acquire the company outright.

“We would expect this passive participation to be just the beginning of broader conversations with Twitter’s board/management that could ultimately lead to active participation and potentially more aggressive ownership of Twitter” , said Daniel Ives, an analyst at Wedbush Securities. Monday morning.

Steven Davidoff Solomon, a professor at the University of California, Berkeley School of Law, said the dossier allowed Mr Musk “to sort of hide any intentions he might have regarding Twitter”. But, he added, filing as a “passive investor” with genuine intent to lobby for control by switching deposit types is “fraudulent,” though rarely prosecuted and difficult to prove.

Mr. Musk’s long and complicated personal relationship with Twitter has gotten him into trouble before, with his tweets about Tesla’s finances leading to legal wrangling with the SEC.

If Mr. Musk is pushing for change on Twitter, he wouldn’t be the first restless investor the company has faced. Activist firm Elliott Management took a stance on Twitter and called for Mr Dorsey to step down in 2020. It then struck a deal with Twitter that included a $1 billion investment from private equity firm Silver Lake and recruited new board members, including Silver Lake. co-managing director, Egon Durban. Silver Lake has partnered with Mr. Musk in his efforts to take Tesla private.

The list of Mr. Musk’s other business ventures is long. Beyond Tesla and SpaceX, he is the founder of the Boring Company, a tunnel construction services company. Adding a role to the list could irritate Tesla shareholders. In the last two months of last year, Mr. Musk sold about $16 billion worth of Tesla stock, or about 10% of his stake in the electric vehicle company.

Executives who have juggled media projects and other private ventures have sometimes found themselves in the crosshairs of politicians. Former President Donald J. Trump, for example, had a low opinion of Amazon because he disagreed with coverage of The Washington Post, which Jeff Bezos bought in 2013. Tesla is a big beneficiary environmental credits, while SpaceX is seeking government contracts.

For Mr. Musk, the investment may also increase the volume of noise he faces on Twitter. Already on Monday, Twitter users were inundating the billionaire with edit button requests on the social media service and asking him to reinstate some banned accounts.

Adam Satarian, Jack Ewing and Pierre Eavis contributed report.

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