Twitter fan Elon Musk buys a 9.2% stake in the social media site for £2.2bn: Tesla boss becomes largest shareholder as stock soars 27.1%
Elon Musk has become the biggest shareholder in Twitter after snapping up a 9.2 per cent stake.
The Tesla boss – the world’s richest man and a prolific user of the social media site – spent £2.2billionn buying around 73.5million Twitter shares.
The 50-year-old is now the company’s largest shareholder and has a holding more than four times bigger than founder Jack Dorsey.
Tesla boss Elon Musk (pictured) – the world’s richest man and a prolific Twitter user of the spent £2.2bn buying around 73.5m shares in social media site
Twitter shares soared 27.1 per cent to nearly $50 as the purchase sent shockwaves through Wall Street and Silicon Valley.
The surge in the share price immediately made Musk’s stake worth £2.8billion – a £600million paper profit in one day.
Analysts speculated that Musk – who has a fortune of over £200billion – could even seek to buy the whole of Twitter in future.
‘Musk’s actual investment is a very small percentage of his wealth and an all-out buyout should not be ruled out,’ said CFRA Research analyst Angelo Zino.
The world’s richest man is a frequent user of Twitter and has more than 80m followers, but he has recently been critical of its approach to free speech.
It reached the point last month when he all but threatened to set up his own rival platform.
Musk, whose tweets have got him into trouble in the past, asked his followers whether they thought the social media platform encouraged free speech, tweeting: ‘Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?
‘Is a new platform needed?’
Analysts at Los Angeles-based investment firm Wedbush Securities said: ‘Given Musk’s long-standing critical view of Twitter and social media platforms, it was viewed that Musk could look to build a new social media platform to compete with Twitter and others.
‘Instead, it looks like Elon has his eyes laser set on Twitter and we would expect this passive stake as just the start of broader conversations with the Twitter board/management that could ultimately lead to an active stake and a potential more aggressive ownership role of Twitter.’
The South African-born father-of-seven is locked in a legal battle to free himself from a deal he made with US regulators in 2018 and regain control over his tweets.
The agreement forces him to have his messages about Tesla pre-approved by a lawyer to avoid breaking rules around the disclosure of market sensitive information.
Musk signed the agreement with the US Securities and Exchange Commission (SEC) after he claimed, in a tweet, that he had secured funding to take the company private at £325 a share.
His announcement roiled the shares and led the SEC to sue him. He eventually settled the dispute by paying a £30million fine.
He also landed himself in hot water in 2018 after he called a British caver who helped in the rescue of trapped Thai schoolboys a ‘pedo guy’ on Twitter.
The tweet caused a furious storm but a US jury in 2019 found that Musk did not defame caver Vernon Unsworth.
Musk saw the valuation of his Tesla car company surpass a market value of $1 trillion last autumn, making it the fifth such firm to reach the milestone, after Apple, Microsoft, Amazon and Google-owner Alphabet.