Elon Musk acquires the highest stake in Twitter Inc – 9.2%, Twitter’s shares soar up 28%
Elon Musk disclosed on Monday that he had bought a 9.2% passive stake in Twitter Inc. Musk holds 73,486,938 shares of common stock in his personal capacity, according to a regulatory filing. This makes him Twitter’s largest shareholder.
As a passive investor, Musk typically should not play an active part in running the company. However, the controversially outspoken business magnate had been tweeting about concerns over the Freedom of Speech undermining democracy on the microblogging site. Musk took to Twitter to post a poll – “Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?” He had also mused about starting an alternative social media platform.
A prolific Twitter user himself with 80 million followers, Musk has remained quiet about his stake. The investment, however, has caused a very large 28% increase in pre-market trading of Twitter Inc’s shares. Tesla’s shares also saw a little growth.
The SEC mandate states that ‘individual passive stakes more than 5% must be disclosed in a 10-day filing window’.
The fines for non-disclosure usually range in the $100,000s. For the richest man in the world, according to both Forbes and Bloomberg lists, this might be just a drop in the bucket. As of March 2022, the net worth of Elon Musk was US$270 billion.
The feud between Musk and the SEC goes way back to 2018 when he was sued by the SEC for making ‘false and misleading’ statements regarding funding for Tesla. The lawsuit was settled, made him lose his chairmanship, and pay $20 million in fines to the SEC. He was also required to have his tweets preapproved if they contained business information.
