He also started a poll asking Twitter users if they want an edit button, a long-awaited feature on which the social media platform has been working
Tesla Inc boss Elon Musk on Monday disclosed a 9.2% stake in Twitter Inc, worth nearly $3 billion, making him the micro-blogging site’s largest shareholder and triggering a rise of more than 27% in the company’s shares.
Musk’s move, revealed in a regulatory filing, comes on the heels of his tweet that he was giving ‘serious thought’ to building a new social media platform, while questioning Twitter’s commitment to free speech.
He also started a poll asking Twitter users if they want an edit button, a long-awaited feature on which the social media platform has been working. It was followed by Chief Executive Parag Agrawal urging users to ‘vote carefully’.
In less than three hours of starting the poll, more than 1.2 million users voted, with over 75% of them backing an edit option.
Last week, in another poll, Musk had asked if Twitter alogrithm should be open source. More than 82% of the users said yes, while former CEO Jack Dorsey said, ‘the choice of which algorithm to use (or not) should be open to everyone.’
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 teasing a go-private deal for Tesla that landed him in hot water with regulators.
Of late, however, 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 adheres to the principle of free speech, to which over 70% voted ‘no.’
Twitter’s latest quarterly results and lower-than-expected user additions have raised doubts about its growth prospects, even as it pursues big projects such as audio chat rooms and newsletters to end long-running stagnation.
It does send a message to Twitter, having a meaningful stake in the company will keep them on their toes, because that passive stake could very quickly become an active stake, said Thomas Hayes, managing member at Great Hill Capital LLC.
A regulatory filing on Monday showed that Musk owns 73.5 million Twitter shares, which are held by the Elon Musk Revocable Trust, of which he is the sole trustee. Vanguard is Twitter’s second-biggest shareholder, with an 8.79% stake, according to Refinitiv data.
Twitter shares rose 27.1% on Monday to close at $49.97. The stock, which had fallen 38% in the past 12 months through Friday’s close, on Monday added as much as $8.38 billion to its market capitalization, which now stands at $39.3 billion.
Musk’s actual investment is a very small percentage of his wealth and an all-out buyout should not be ruled out, CFRA Research analyst Angelo Zino wrote in a client note.
The stake in Twitter is more likely to result in positive outcomes for shareholders than negative ones, said Ryan Jacob, chief executive officer of Jacob Asset Management, 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 probably be at a higher price than it is now, he said. If it gets other companies interested (in acquiring Twitter), it’ll probably be at a higher price than right now.