Elon Musk, the billionaire, has taken a nearly $3 billion (£2.3 billion) stake in Twitter, becoming the social media platform’s largest shareholder. According to filings made to the US Securities and Exchange Commission (SEC) on Monday, the world’s richest man, who has a penchant for eccentric behavior frequently involving tweets, has built a 9.2 percent stake in Twitter.
The CEO of Tesla and SpaceX, who has more than 80 million followers on Twitter and ranks in the top ten most popular users globally, paid $2.89 billion for the stake at Twitter’s closing share price on Friday.
On the back of the news, the company’s shares rose by more than a quarter in pre-market trading, adding about $8 billion to its $31.5 billion valuations, before easing back to a 21 percent gain in early trading. Musk’s shares are now worth more than $3.5 billion as a result of the stock price increase.
Musk has been harshly critical of Twitter, and he recently stated that he was “considering” creating his own social media platform after questioning whether it adequately supported free speech. He now owns more than four times the 2.25 percent stake held by Twitter co-founder Jack Dorsey.
Analysts believe Musk’s shareholding will eventually lead to the 50-year-old taking an active interest in the microblogging site, which could lead to a buyout. “We would expect this passive stake to be just the beginning of broader discussions with the Twitter board/management that could eventually lead to an active stake and a potentially more aggressive ownership role of Twitter,” said Dan Ives, an analyst at Wedbush Securities.
Musk, whose personal fortune is estimated to be $289 billion – nearly $100 billion more than the world’s next richest person, Amazon founder Jeff Bezos – has frequently found himself in hot water for tweeting divisive remarks.
The Tesla CEO’s many dubious Twitter moments include calling Vernon Unsworth, a diver who assisted in the rescue of a group of young football players trapped in a flooded cave in Thailand, a “pedo guy” after he criticized Musk’s plan to save them with a submarine.
Musk eventually deleted the tweets and apologized to Unsworth, who filed a $190 million lawsuit in response to the tweets. The jury determined that Musk did not defame Unsworth, and after the verdict, Musk told reporters in the courtroom hallway, “My faith in humanity is restored.”
Tesla advertised a job for a customer support specialist last year, with responsibilities including handling social media complaints about the South African-born American entrepreneur.
Musk deleted a meme comparing Canadian Prime Minister Justin Trudeau to Adolf Hitler in February after it drew widespread criticism. In December, he tweeted a meme that compared the face of Twitter’s new CEO, Parag Agrawal, to that of former Russian dictator Joseph Stalin.
Musk has also been in trouble with the US Securities and Exchange Commission (SEC) for tweets that have had significant ramifications for the companies he runs.
In 2018, he announced that he had “secured” funding to take Tesla private, prompting the SEC to require Musk to obtain pre-approval for certain public communications concerning the electric car company’s share price.
Musk reached an agreement with the SEC, paying a $20 million fine and stepping down as Tesla’s chairman while claiming “harassment” and “unjustified action.” While under SEC investigation, he smoked marijuana on a live web show, resulting in a 6% drop in Tesla’s share price and the departure of two of its senior executives.
He enraged the SEC again last year when he asked his Twitter followers if he should sell 10% of his stake in Tesla, causing the company’s share price to plummet, prompting the US regulator to issue a subpoena to see if Musk was complying with its previous settlement.
Musk met his on-again, off-again girlfriend Grimes, real name Claire Boucher, on Twitter. In 2020, he tweeted that the couple’s newborn son would be given the cryptic name X A-12. In a later social media post, Grimes explained the name. In December, the couple had a second child, a girl named Exa Dark Siderl Musk, through surrogacy.