Business

Twitter stock jumps 27% after Elon Musk becomes top shareholder

Elon Musk, head of Tesla Inc., announced a 9.2% stake in Tesla on Monday Twitter Inc. is valued at nearly $3 billion, making it the microblogging site’s largest shareholder and sparking a more than 27% surge in the company’s shares.

Musk’s move, revealed in a regulatory filing, follows his tweet that he was “seriously considering building a new social media platform” while questioning Twitter’s commitment to free speech.

A prolific Twitter user, Musk has over 80 million followers since joining the site in 2009 and has used the platform to make several announcements, including alluding to a go-private deal for Tesla, which included him with brought to the regulators in hot water.

Recently, however, the world’s richest person has been critical of the social media platform and its policies, and recently conducted a Twitter poll asking users if they believe the platform upholds the principle of free speech, for that over 70% voted “no” .”

Twitter’s recent quarterly results and lower-than-expected user additions have raised questions about its growth prospects, even as it pursues big projects like audio chat rooms and newsletters to end prolonged stagnation.

“It’s sending a message to Twitter…a significant stake in the company will keep them on their toes because that passive stake could turn into an active stake very quickly,” said Thomas Hayes, managing director at Great Hill Capital LLC.

Musk — who has a net worth of about $300 billion, according to Forbes — has reduced his stake in Tesla since November, when he said he would divest 10% of his stake in the electric-car maker. Since then he has already sold shares worth $16.4 billion.

A regulatory filing filed Monday showed Musk owns $73.5 million Twitter shares, 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.

Shares of Twitter rose 27.1% on Monday to close at $49.97. The stock, which was down 38% in the 12 months ended Friday’s close, added $8.38 billion to its market cap on Monday, which now stands at $39.3 billion.

Twitter did not immediately respond to a request for comment on Musk’s move.

buyout?
“Musk’s actual investment is a very small percentage of his assets, and a full buyout should not be ruled out,” wrote Angelo Zino, an analyst at CFRA Research, in a note to clients.

Holdings in Twitter will result in positive rather than negative outcomes for shareholders, said Jacob Asset Management chief executive officer Ryan Jacob, who said Twitter is one of the fund’s largest holdings.

“If (Musk) decides to take an active position and Twitter goes private, it will likely come at a higher price than it does now,” he said. “If other companies are interested (in acquiring Twitter), it will probably be at a higher price point than it is now.”

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

He is also the founder and chief executive officer of SpaceX and runs brain chip startup Neuralink and infrastructure company The Boring Company.

Twitter was the target of activist investor Elliott Management Corp in 2020, when the hedge fund argued that the social networking company’s then-boss and co-founder, Jack Dorsey, was paying too little attention to Twitter while running what was then known as Square Inc. was called.

Dorsey, who owns a more than 2% stake in Twitter, stepped down as CEO and chairman last November, handing over the reins to company veteran Parag Agrawal.

Meanwhile, Musk and Dorsey have found some common ground by rejecting the so-called Web3, a vague term for a utopian version of the internet that is decentralized.

https://economictimes.indiatimes.com/markets/stocks/news/twitter-stock-surges-27-after-elon-musk-becomes-top-shareholder/articleshow/90652973.cms Twitter stock jumps 27% after Elon Musk becomes top shareholder

Adam Bradshaw

TheHitc is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@thehitc.com. The content will be deleted within 24 hours.

Related Articles

Back to top button