Elon Musk, the billionaire chief executive of Tesla and the world’s wealthiest person, bought a nearly 10 percent stake in Twitter, the social media platform where he has more than 80 million followers and shares everything from business ideas and memes to, this past weekend, his experience at a famed Berlin nightclub.
The purchase, made public on Monday, April 4, 2022, in a regulatory filing with the Securities and Exchange Commission, is worth about $2.89 billion based on the closing price of Twitter’s stock on Friday. News of Mr. Musk’s buy-in sent Twitter share prices soaring.
A spokesperson for Twitter did not immediately respond to messages requesting comment. Mr. Musk likewise did not respond to a request for comment.
The purchase, equal to 9.2 percent of the company, appears to make Mr. Musk Twitter’s largest shareholder. His holding is slightly larger than Vanguard’s 8.8 percent at the end of last year, and it dwarfs the 2.3 percent stake of Jack Dorsey, Twitter’s former chief executive. The shares represent a fraction of Mr. Musk’s reported $270 billion-plus net worth.
Musk has criticized the company in recent weeks for failing in his view to adhere to free speech principles, and he has openly considered starting a social network of his own that would be open source. His long and complicated personal relationship with the platform has also gotten him in trouble, with his tweets about Tesla’s finances resulting in legal wranglings with the S.E.C.
Some of Mr. Musk’s ideas, like moving Twitter to an open-source network, have earned the support of Twitter’s co-founder, Mr. Dorsey, who stepped down as chief executive late last year.
“The choice of which algorithm to use (or not) should be open to everyone,” Mr. Dorsey said last month in response to a tweet from Mr. Musk advocating an open-source algorithm for the platform. Mr. Dorsey, who is friendly with Mr. Musk, is expected to leave the Twitter board in May.
It is unclear what Mr. Musk’s plans are beyond the large shareholder position and whether he’ll ask — or be invited — to join Twitter’s board. Mr. Musk filed a securities document indicating that he planned for the investment to be passive, meaning he does not intend to pursue control of the company. But there was also speculation Monday that he could change the status of his investment, continue buying shares or even try to acquire the company outright, today’s DealBook newsletter reported.
“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,” Daniel Ives, an analyst at Wedbush Securities, said Monday morning.
If Mr. Musk pushes for change at Twitter, he would not be the first agitated investor the company has had to contend with in recent years. The activist firm Elliott Management took a position in Twitter and called for Mr. Dorsey’s removal in 2020. It later struck a deal with Twitter that included a $1 billion investment from the private equity firm Silver Lake and brought on new board members, including Silver Lake’s co-chief executive, Egon Durban. Silver Lake partnered with Mr. Musk in his efforts to take Tesla private
Mr. Musk’s list of other business ventures runs long: Beyond Tesla, he is chief executive of the rocket company SpaceX and founder of The Boring Company, a tunnel construction services company. Adding another role to the list could irk Tesla shareholders. In the last two months of last year, Mr. Musk sold around $16 billion of Tesla stock, equivalent to roughly 10 percent of his stake in the electric vehicle company.
Tesla has defied the supply chain problems that have strained most traditional carmakers, adding to Mr. Musk’s wealth and his influence in the tech and auto industries. Tesla nearly doubled sales last year, approaching one million vehicles sold. On Saturday Tesla said it sold 310,000 cars in the first three months of 2022, a 70 percent increase from the same period a year earlier — gains that contrast with steep declines reported last week by General Motors and Toyota Motor.
Tesla’s steadily expanding production network, including new factories in Austin, Texas, and near Berlin, positions the company to rival carmakers like BMW and Mercedes-Benz in numbers of vehicles sold. Despite an array of new battery-powered models from Ford Motor, Kia and others, Tesla continues to dominate the market for electric cars, the industry’s fastest-growing segment.
Still, executives who have juggled media projects with other private endeavors have sometimes found themselves in policymakers’ crosshairs. Former President Donald J. Trump, for example, took a dim view of Amazon because he disagreed with coverage in The Washington Post, which Jeff Bezos bought in 2013. Tesla is a large beneficiary of environmental credits, while SpaceX pursues government contracts.
Regardless of potential pushback, Mr. Musk may stand to gain from the investment. The document detailing Mr. Musk’s stake said it was worth about $3 billion at Friday’s closing price. It is dated March 14, and Twitter’s shares are up about 50 percent since then.
Source: The New York Times