Elon Musk takes 9% stake in Twitter, sends shares higher

Twitter stock rose 19% to $46.88 in premarket trading, surpassing an earlier gain of more than 25% after Mr Musk’s stake was disclosed.

In a securities filing disclosed on Monday, Mr. Musk reported owning approximately 73.5 million shares of the company, a roughly 9.2% stake. That stake, at $2.89 billion as of Friday’s closing price, would make Mr. Musk Twitter’s largest shareholder, according to data from FactSet.

In recent weeks, Mr Musk, the world’s richest man, has questioned the company’s freedom of expression on Twitter and said he was considering starting a rival social media company of his own.

On March 25, Mr. Musk tweeted a poll, saying, “Freedom of expression is essential to a functioning democracy. Do you believe that Twitter strictly adheres to this principle?”

“The results of this election will be important. Please vote carefully,” Mr Musk added in a follow-up tweet.

Of the nearly 2 million people who responded, more than 70% did not vote.

Twitter and Tesla representatives did not immediately return requests for comment.

“It looks like Elon’s eyes are laser-set on Twitter,” Wedbush Securities analyst Dan Ives wrote in a research note Monday morning. “We would expect this passive stake to be just the start of a wider conversation with the Twitter board,” he said. Given that this could lead to an active stake in Twitter and a potentially more aggressive ownership role.

Mr Musk has a net worth of $273 billion as of Monday, according to the Bloomberg Billionaires Index, a daily ranking of the world’s richest people.

In recent years, Twitter and Meta Platforms Inc.’s Facebook and Instagram have faced criticism for not playing a substantial role in censoring speech and moderating content on their platforms.

Algorithms are commonly used on social-networking platforms to increase engagement. The more time people spend scrolling through their feed, the more ads can be shown to them and the more money the platform can make. Code to feed on users’ behavior can be written to provide more of the same kind of information that users initially expressed interest in.

Mr Musk polled his Twitter followers on March 24, asking whether “the Twitter algorithm should be open source.”

Twitter co-founder Jack Dorsey, who stepped down as CEO last year, retweeted Mr Musk’s poll, saying: “The choice of which algorithm to use (or not) should be open to all.” “

There have been other attempts to compete with today’s mainstream social platforms, some of which are more successful than others. People like Gab and 4chan are known for their loose content controls and have developed modest followings over the years. Most recently, Parler launched in 2018, touting itself as a fair, free-speech alternative to the big social platforms, and this year former President Trump’s Truth Social emerged as another.

Mr Musk has long been active on Twitter, sharing information about his businesses with his more than 80 million followers, including electric-vehicle maker Tesla, rocket company Space Exploration Technologies Corp and transportation company The Boring Company.

In an infamous 2018 tweet, Mr. Musk said he was considering taking his electric car maker private and had secured funding for $420 a share.

This pushed the stock up and prompted an investigation by the US Securities and Exchange Commission, which found that Mr Musk had never discussed the specifics of such a private deal. and that his statement constituted fraud.

Mr. Musk and Tesla settled the SEC lawsuit in 2018, agreeing to pay $20 million each, and Mr. Musk stepped down as chairman. He also agreed to pre-clear tweets that were deemed material to Tesla shareholders, along with Tesla’s lawyers.

Last month he asked a federal judge to settle with regulators about the 2018 incident.

He has also used Twitter to publicly attack the SEC.