According to a US Securities and Exchange Commission filing Monday (4th April 2022), Tesla CEO Elon Musk has bought a 9.2 percent passive holding in social media behemoth Twitter Inc. Twitter’s stock increased by as much as 26% in premarket trading. The investment is worth US $2.8 billion, according to calculations based on Twitter’s most recent closing.
Twitter shares jumped almost 26% in premarket trade after Musk filed a regulatory filing disclosing his company purchase on Monday.
The CEO of Tesla and SpaceX, who ranks in the top ten most popular users on Twitter with more than 80 million followers, paid US $2.89 billion for the stake on Friday at Twitter’s closing share price.
On the news, the company’s stock rocketed by more than a quarter in premarket trade, adding roughly US $8 billion to its US $31.5 billion market value before easing back to a 21 percent gain in early trading. Musk’s stake is now worth more than US $3.5 billion due to the stock price increase.
The reason for this investment:
Musk has been a vocal critic of Twitter, recently stating that he was “considering” creating his own social media site after questioning whether it fully supported free expression. He now has a stake in Twitter that is more than four times that of Twitter co-founder Jack Dorsey’s 2.25 percent.
Analysts predict Musk’s stock purchase will lead to the 50-year-old taking a more active role in the microblogging site, maybe leading to an acquisition.
“We would anticipate this passive stake to be the start of broader conversations with the Twitter board/management that might eventually lead to an active stake and a potential more aggressive ownership role for Twitter,” said Dan Ives, a Wedbush Securities analyst.
Twitter – The path ahead:
Musk is one of the most well-known Twitter users, and he has a history of getting into controversy on the platform. Tesla Inc. CEO Elon Musk is attempting to get out of a 2018 agreement with the Securities and Exchange Commission (SEC) that imposed restrictions on his tweeting about the electric vehicle company.
The announcement will be another key test for new Twitter CEO Parag Agrawal, who took over from Jack Dorsey after his abrupt resignation in November. Agrawal promised to improve product execution, boost accountability, and make speedier decisions. By the end of 2023, the company has established aggressive growth goals, including growing annual revenue to US $7.5 billion and a target of reaching 315 million daily users
We try our best to fact-check and bring the best, well-researched, and non-plagiarized content to you. Please let us know
-if there are any discrepancies in any of our published stories,
-how we can improve,
-what stories you would like us to cover and what information you are looking for, in the comments section below or through our contact form! We look forward to your feedback, and thank you for stopping by!
Next Article
, Tesla CEO Elon Musk has bought a 9.2 percent passive holding in social media behemoth Twitter Inc. Twitter's stock increased by as much as 26% in premarket trading.){kind=link}