Twitter shares soar more than 29% after Elon Musk takes 9% stake in social media company
Outspoken Tesla CEO Elon Musk purchased a giant stake in Twitter that makes him the largest outside shareholder in the social media stock, not long after criticizing the company for what he said was its failure to uphold the tenets of free speech.
Musk owns 73,486,938 shares of Twitter, which represents a 9.2% passive stake in the company, according to a Securities and Exchange Commission 13G filing released Monday. The stake is worth $2.89 billion, based Twitter’s closing price Friday.
The purchase comes less than two weeks after Musk criticized the company, polling people on Twitter about whether it adheres to free speech principles. “Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy,” Musk tweeted. “What should be done?”
Late last month, Musk also said he was considering building a new social media platform.
While it is classified as a passive stake, investors were bidding shares higher on the chance this could lead to something more. Twitter stock surged more than 29% in the afternoon.
“Musk could try to take a more aggressive stance here on Twitter,” Wedbush analyst Dan Ives said Monday on CNBC’s “Squawk Box.” “This eventually could lead to some sort of buyout.”
“This makes sense given what Musk has at least been talking about, at least from a social media perspective,” Ives said.
Twitter declined to comment.
Musk is a frequent user of Twitter and has more than 80 million followers on the platform. However, some of his tweets have gotten the Tesla chief into hot water over the years.
On Aug. 7, 2018, Musk tweeted he had “funding secured” to take Tesla private at $420 per share. The 12 months following that tweet were a roller coaster for Musk and Tesla shareholders. In that time, the company set performance records, but also had to deal with litigation, government inquiries and layoffs. Musk also reached a settlement with the SEC that removed him from the role of chairman at Tesla.
— CNBC’s Jessica Bursztynsky contributed to this report.