Stocks soar as Elon Musk purchases 9.2 per cent stake in Twitter

Tesla billionaire Elon Musk has bought an incredible 9.2 per cent stake in Twitter, sending stocks in the online platform soaring.

Musk, the richest man in the world with a fortune of $273 billion, bought more than 73 million Twitter shares on March 14, a US securities filing shows.

The stake is worth $2.89 billion (A$3.4 billion), based on Twitter‘s Friday closing price.

Investors responded quickly. Shortly after US markets opened, Twitter’s stock was trading at about $49, up by around 26 per cent.

“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,” analysts Daniel Ives and John Katsingris of Wedbush wrote in a note.

The groundbreaking buy-in has made Musk one of the largest shareholders in the company and he now controls more than four times the stock of its founder Jack Dorsey, who owns just 2.25 per cent.

Musk recently said he was giving “serious thought” to creating a new social media website.

“Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?” he asked his 80 million followers last month.

He then asked: “Is a new platform needed?”
 

Musk has built one of the largest followings ever seen on the platform in recent years, posting everything from innocuous memes to criticisms of news and culture, while also offering a helping hand or advice on current events.

He has also built an unprecedented amount of power in the cryptocurrency sphere and is now able to manipulate interest in certain coins to the tune of billions of dollars in a single tweet.

Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy.

What should be done? https://t.co/aPS9ycji37

— Elon Musk (@elonmusk) March 26, 2022

Musk also owns Tesla, SpaceX and Neuralink.

Last year he sold 10 per cent of his stake in Tesla after asking his Twitter followers for advice following the news that his company was valued at more than $1trillion.

In summer 2018 Musk published a tweet where he claimed that he had the appropriate funding to take Tesla private, without providing proof.

The tweet caused a brief spike in Tesla’s share price but the SEC said the statements on Twitter were “false and misleading.” The mogul then agreed that any tweets capable of moving Tesla’s share price would be screened by lawyers, as part of a deal that saw him pay $20 million to settle a fraud case brought by the SEC.

Then in early March, Musk asked a New York judge to overturn the agreement with the stock market watchdog on his tweets.

His lawyer said the dispute with the SEC was “yet another attempt to harass Tesla and silence Mr Musk.”

Musk has also used Twitter to court controversy away from the business world: in March he challenged Russian President Vladimir Putin to a fight, with the fate of Ukraine at stake; and in February he drew condemnation for a tweet comparing Canadian leader Justin Trudeau to Adolf Hitler.