Musk becomes largest Twitter shareholder

Elon Musk, the maverick billionaire, has revealed on Monday that he has purchased 9.2 per cent of Twitter’s shares, worth nearly US$3 billion, raising his stake in the company to 25 per cent, thus becoming the largest stakeholder in the microblogging firm. He has 73.5 million Twitter shares with Elon Musk Revocable Trust. The next biggest shareholder with 8.79 per cent stake is Vanguard. Founder-owner Jack Dorsey, who had stepped down from his position as chairman of Twitter and chose India-born Parag Agrawal as his successor, owns up to 2 per cent of shares in the company.

Musk has predictably explained the reason for his increase in stakes in Twitter because he felt that Twitter was not adhering to its principle of free speech, which was losing its popularity as it was not adding new users. Musk was toying with the idea of building a new social media platform because of his dissatisfaction with Twitter. Reuters quotes Thomas Hayes, managing member of Great Hill Capital LLC as saying, “It does send a message to Twitter…having a meaningful stake in the company will keep them on their toes, because that passive stake could very quickly become an active stake.”

According to another market research analyst, Angelo Zino of CFRA research, Musk’s Twitter investment is a small portion of his total wealth, and “an all-out buy-out should not be ruled out.”

Musk has 80 million Twitter followers, and he has been an active tweeter ever since he joined in 2009. And he had even tweeted about the electric vehicle manufacturer Tesla going private which had created problems for him with the market regulator. He did a Twitter poll recently about whether Twitter stood up for free speech, and 70 per cent of them answered in the negative.

South Africa-born Musk, who has been named the Person of the Year in 2022 by Time magazine, has been much more candid in his political perspective than many of his fellow-billionaires. He was the one offered Star network satellite communication support to Ukrainians when they lost the communication links after Russia invaded the country on February 24. And he had been taunting politicians like Bernie Sanders of the Democrat Party, who had unsuccessfully bid for his party’s presidential nomination in 2016 as well as in 2020. So, it is possible that unlike Warren Buffet who invests for the sake of increasing his assets and there are no political motives, Musk shows rare political daring for a businessman. Musk is not the usual corporate predator like others. He has ideas of domination, but what drives his domination is a sense of politics.

It is not yet clear as to how far Musk would go in fighting battles when those battles clash with his business interests, and whether he is willing to fight the good fight with the powers that be when the need arises. But his futurist sense seems to tell him that social media platform are crucial means of communication in the digital world, though he had agreed with Dorsey that the idea for a Web3, for an Internet that is decentralized.

Twitter’s shares which had fallen 38 per cent in the last 12 months, has added US$8.38 billion to its market capitalization, which now stands at US$39.3 billion, and was trading on Friday at US$47.19. The Musk move has made a difference to Twitter’s market fortunes. It will be a matter of speculation as to what changes Musk’s presence as the largest Twitter shareholder will make to the microblogging platform. Will Musk step out and take on governments when Twitter’s freedom is challenged next time? His initial move to increase his stake in Twitter shows that Musk means what he says, that he wants to fight the good fight for free speech.