(Photo: Brett Jordan/Unsplash)A new Securities and Exchange Commission (SEC) filing reveals that billionaire Tesla CEO Elon Musk has purchased nine percent—or 73,486,938 shares—of Twitter stock.
The filing, submitted yesterday, makes Musk Twitter’s largest shareholder with a stake worth $2.89 billion. (This is based on Twitter’s closing price from the Friday afternoon prior.) The transaction has caused Twitter’s share price to balloon up to 27 percent, down just one point from Monday.
Musk’s purchase is surprising, given his very public beef with Twitter. Musk has gotten in trouble with the SEC before for influencing Tesla stock prices with what he claims to be innocent tweets. Following the initiation of that little lawsuit, Musk complained that “nothing less than First Amendment freedoms [were] imperiled.” That isn’t the last time Musk ranted about what he believes to be First Amendment violations on social media; he’s since tweeted a poll asking if other users believe Twitter “rigorously adheres” to the principle of free speech and suggested the Internet’s “town square” move to a new platform. Musk most recently attracted attention from the SEC for tweeting yet another poll asking if he should offload billions of dollars in Tesla stock, after which Tesla’s share price tanked.
If you find it concerning that a massively rich public figure can quickly buy up a large portion of one of the world’s most popular social platforms, you’re not alone—especially when the platform’s own former CEO possesses less than a third of what Musk now owns. Some believe Musk will use his significant stake in Twitter to influence its rules or operations despite not actually working for the company (or its advisory board, for that matter). Others believe this is just the beginning, with a total buyout on the horizon.
“Given Elon’s prior comments about wanting to start a social media company, I would say it’s possible that he will increase his stake in Twitter or take a controlling interest in the company sometime soon,” Tom Forte, an analyst at DA Davidson & Co., told Bloomberg. Other experts agree, with CFRA Research analyst Angelo Zino telling Reuters “an all-out buyout should not be ruled out.” If Musk really did buy Twitter, the sale would be a bit reminiscent of Jeff Bezos’ purchase of The Washington Post back in 2013.
Of course, there’s always the chance that Musk just wanted to flex his financial power in the face of a company that’s gotten on his nerves a few times. As Great Hill Capital LLC managing member Thomas Hayes said to Reuters, Musk could have been looking for a way to keep Twitter “on their toes.” It’s a ridiculous possibility, which means it’s very much something Musk would do.