Copyright © 2012-2023 Newman Jiang
Copyright © 2012-2023 Newman Jiang
On Monday, April 4th, Twitter [TWTR] sprang to life [+ 27% @$50] from its recent doldrums caused by negative comments on its censorship and cancellation policies as seemingly defined by its founder Jack Dorsey.
Talk about a potential clash of egos, if not titans. Elon Musk disclosed a surprise 9.2% holding in the ubiquitous social media site to become its largest single shareholder, dwarfing founder Jack Dorsey’s stake of 2.25%.
Presently, Elon Musk is the richest individual on the planet with his multi-billion-dollar shareholdings in Tesla and Space X, and a worth estimated at just short of $300 billion. For Elon, such a high-profile investment is pocket change, and even a speculated takeover [denied] would not be problematic given the market cap of TWTR at $31.5 billion.
On or about March 14th, Elon Musk paid approximately $2.9 billion for a 9.2% stake in Twitter. The price paid would suggest between $32 & $33 a share; whether it was accumulated or a single block has yet to be revealed.
Without being obliged by SEC rules to reveal his holding until April 4th, he tweeted on March 24th that he was “worried about de facto bias in the TWTR algorithm having a major effect [adverse] on public discourse.”
A day later, he again tweeted, “free speech is essential to a functioning democracy” and polled his 80 million-plus followers whether or not they agreed that TWTR rigorously adhered to this principle: 70.4 % did not.
Elon’s substantial business arrangements and relationships in China and the CCP could present something of a quandary for his very public opinions. Still, not to be deterred, he continues, “What should be done?”
Given 50-year-old Elon’s interest in ‘microblogging’ and his many high-profile, some legally suspect, and often controversial tweets of recent years, it could be speculated that he sees TWTR as a vehicle to expand that interest.
Dan Ives, an analyst at Wedbush Securities, opines, “we would expect this passive stake to start a broader conversation with the TWTR board and management that could ultimately lead to a more active and aggressive ownership role at Twitter.”
Life is full of surprises wherever Elon ventures.