Musk takes 9% stake in Twitter to become top shareholder, starts poll on edit button According to Reuters

© Reuters. FILE PHOTO: Tesla CEO Elon Musk speaks during a conversation with legendary game designer Todd Howard (not pictured) at the E3 gaming conference in Los Angeles, California, U.S., June 13 2019. REUTERS / Mike Blake

By Nivedita Balu

(Reuters) – Tesla (NASDAQ:) Inc boss Elon Musk on Monday revealed a 9.2% stake in Twitter Inc (NYSE:), worth nearly $3 billion, making him the microblogging site’s largest shareholder and sending the company’s stock up more than 27%.

Musk’s move, revealed in a regulatory filing, stemmed from his tweet that he was giving “serious thought” to building a new social media platform, while also questioning about Twitter’s commitment to free speech.

He also started a poll asking Twitter users if they’d like an edit button, a long-awaited feature the social media platform has been working on. This was followed by Parag CEO Agrawal urging users to “vote carefully”.

In less than three hours from the start of the poll, more than 1.2 million users voted, with more than 75% of them in favor of the edit option.

Last week, in another poll, Musk asked if the Twitter algorithm should be open source. Over 82% of users said yes, while former CEO Jack Dorsey said, “the choice of which algorithm to use (or not) should be open to everyone.”

An prolific Twitter user, Musk has had more than 80 million followers since joining the site in 2009 and has used the platform to make a number of announcements, including the introduction of a deal. privacy for Tesla made him subject to regulators.

Ultimately, though, the world’s richest person has been critical of the social media platform and its policies, and recently ran a Twitter poll asking users if they believed the platform adhere to the principle of free speech or not, with more than 70% voting “no.”

In December, Musk released a meme comparing CEO Agrawal to Soviet dictator Joseph Stalin and showing Jack Dorsey as a close associate who was later executed.

Twitter’s latest quarterly results and lower-than-expected user additions have cast doubt on Twitter’s growth prospects, even as it pursues mega projects like audio chat rooms. and newsletters to end protracted stagnation.

“It sends a message to Twitter…

Musk – who, according to Forbes, is worth about $300 billion – has reduced his stake in Tesla since November, when he said he would sell off his 10% stake in the automaker. electricity. He has sold $16.4 billion worth of stock since then.

A regulatory filing on Monday showed Musk owns 73.5 million shares of Twitter, held by the Elon Musk Revocable Trust, of which he is the sole trustee. Vanguard is Twitter’s second-largest shareholder, with an 8.79% stake, according to Refinitiv data.

Twitter shares rose 27.1 percent on Monday to close at $49.97. The stock, which has fallen 38% in the 12 months through the end of Friday, on Monday added $8.38 billion to its market capitalization, which currently stands at $39.3 billion.


CFRA Research analyst Angelo Zino wrote in a client note: “Musk’s actual investment is a very small percentage of his wealth and a full acquisition should not be ruled out.”

Ryan Jacob, chief executive officer of Jacob Asset Management, says Twitter shares are more likely to deliver positive shareholder returns than negative, said Ryan Jacob, chief executive officer of Jacob Asset Management. Twitter is one of the biggest fund holdings.

“If (Musk) decides to keep an active position and Twitter goes private, it will likely be at a higher price point than it is now,” he said. “If it were of interest to other companies (acquisition of Twitter), it would probably be at a higher price point right now.”

Musk has previously made early-stage investments in companies, including online payment processor Stripe Inc and artificial intelligence firm Vicarious.

He is also the founder and CEO of SpaceX, and leads brain chip startup Neuralink and infrastructure company Boring Company.

Twitter is the target of activist investor Elliott Management Corp in 2020, as the hedge fund argues that Jack Dorsey, the social networking company’s boss and co-founder, has paid too little attention to Twitter while Twitter still running what was then called Square Inc (NYSE:).

Dorsey, who owns more than 2% of Twitter shares, stepped down as CEO and Chairman last November, handing power to veteran company Parag Agrawal.

Meanwhile, Musk and Dorsey have found some common ground in getting rid of the so-called Web3, a vague term for a utopian version of the decentralized Internet.

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