Tesla CEO Elon Musk Takes Stake in Twitter — Analyst Says It Could Lead to a Buyout
Tesla CEO Elon Musk has taken a stake in Twitter Inc. after stating that he’s “giving critical thought” to constructing a brand new social media platform — one which prioritizes free speech. An analyst says this might ultimately result in a buyout.
Elon Musk’s Stake in Twitter
Tesla and Spacex CEO Elon Musk disclosed that he has taken a 9.2% stake in Twitter Inc. in a filing with the U.S. Securities and Exchange Commission (SEC) Monday.
The Elon Musk Revocable Trust, for which the Tesla boss is the only real trustee, now holds 73,486,938 shares of Twitter, the SEC submitting particulars, including that this quantity represents 9.2% of Twitter’s frequent inventory, based mostly on 800,641,166 shares excellent as of Feb. 10. The stake is value $2.89 billion, based mostly on Twitter’s closing value on Friday.
Musk’s funding within the social media large got here just a little over every week after he stated he’s “giving serious thought” to creating a brand new social media platform that might deal with free speech as a high precedence.
Musk, a frequent person of Twitter, additionally arrange a ballot on the platform asking his 80 million followers whether or not they believed Twitter rigorously adheres to the free speech precept. The Tesla boss hinted that the implications of the ballot “might be vital.” Over two million votes have been counted and 70.4% stated no.
With the 9.2% stake, Musk has change into Twitter’s biggest shareholder. By comparability, Twitter founder Jack Dorsey, who stepped down because the CEO of the corporate final 12 months, holds a 2.25% stake.
While Musk’s funding in Twitter is taken into account a passive stake, buyers are hopeful that this might result in one thing extra, and Twitter’s shares surged greater than 25% within the pre-market.
Wedbush analyst Dan Ives advised CNBC Monday:
Musk might attempt to take a extra aggressive stance right here on Twitter … This ultimately might result in some kind of buyout.
“This is sensible given what Musk has at the least been speaking about, at the least from a social media perspective,” Ives added. The analyst additionally wrote in a be aware: “We would anticipate this passive stake as simply the beginning of broader conversations with the Twitter board and administration that might in the end result in an energetic stake and a possible extra aggressive possession position of Twitter.”
Paul Hickey, Bespoke Investment Group’s co-founder, shared with CNBC: “Twitter is a $30 billion firm. Elon Musk is value $300 billion. It’s not essentially a giant stake for him … I’m enthusiastic about it from a Tesla shareholder’s perspective. As they’re rising, do you really need him taking his eye off the ball?”
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