Elon Musk is taking a 9.2% stake in Twitter just days after Tesla’s billionaire CEO criticized the social network for stifling free speech and publicly mused about creating a rival platform.
An SEC filing revealed on Monday that Musk — the world’s richest person with a fortune of more than $287 billion, according to Forbes — bought some 73.5 million shares of the company, which are worth an estimated $2.89 billion.
News of the acquisition — which makes Musk Twitter’s largest shareholder, ahead of Vanguard, Morgan Stanley and BlackRock — sent shares of Twitter soaring by more than 25% in early trading on Monday.
Musk has been raising questions about the ability to communicate freely on Twitter, tweeting last month about free speech and the social media platform.
“Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?” he tweeted.
The next day, Musk took it a step further, writing: “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?”
In a separate tweet, Musk said that he was “giving serious thought” to creating a new social media platform.
Tech giants like Twitter, Facebook, Google, and Amazon have been accused by some conservatives and free speech advocates of banning users with unpopular views.
Then-Twitter CEO Jack Dorsey said last year that his company erred when it censored a New York Post article about Hunter Biden’s laptop in the weeks leading up to the presidential election.
Due to Twitter’s share structure, Musk’s stake in the company will give him far more influence over the site’s operations than can be exerted by outside investors in tech giants like Meta or Google.
While Mark Zuckerberg holds special dual-class shares that effectively allow him to override Meta investors’ objections and do whatever he wants, Twitter only has one class of shares. That means Twitter shares held by founder Jack Dorsey give Dorsey the same voting power as shares held by Musk.
In a demonstration of the power that can be wielded by Twitter investors, Dorsey stepped down as Twitter’s CEO in 2021 following a heated activist campaign from shareholder Elliott Management. Elliott held around 4% of Twitter shares at the time — less than half of Musk’s current stake.
Musk, who is also the CEO of the SpaceX rocket company, has also gotten in trouble for his itchy Twitter fingers.
Last month, the Securities and Exchange Commission on Tuesday filed papers in Manhattan federal court that noted the Tesla CEO was bound by a 2018 agreement to get permission in advance if he wished to tweet certain posts.
Tesla said that this past November, the SEC sought “information on our governance processes around compliance” with a September 2018 settlement between the company and the regulatory agency.
The subpoena was issued just 10 days after Musk triggered a stock sell-off when he asked his Twitter followers if he should sell 10% of his stake in the company.
Tesla’s stock price dipped by some 16% over the course of the two days of trading that followed the tweet.
As part of the settlement between Tesla and the SEC, Musk agreed to step down as chairman and to appoint independent members to the company’s board of directors.
He also agreed to pay $20 million while the company kicked in another $20 million in fines. The SEC said Musk agreed to “establish a new committee of independent directors and put in place additional controls and procedures to oversee [his] communications.”
It rocketed to the number-one spot on Apple’s free apps chart when it was made available for download in February — days after Trump made his only post on the site, telling fans that “your favorite president will see you soon.”
But a combination of technical glitches, a lengthy waiting list to join, a collapse of the share price, and Trump’s apparent disinterest in posting messages has marred the app’s rollout.
Source: Nypost
