When Elon Musk mulled taking Tesla non-public in 2018, he posted on Twitter to inform the world about it. When he acquired caught in visitors in 2016, he tweeted the concept of an underground tunnel system to alleviate “soul destroying” congestion. And when he challenged President Vladimir V. Putin of Russia to one-on-one fight final month, he broadcast it on Twitter.
Now Mr. Musk is placing his cash the place he mouths off.
On Monday, a regulatory filing with the Securities and Alternate Fee revealed that Mr. Musk, the billionaire chief government of Tesla and SpaceX and the world’s wealthiest individual, had purchased a 9.2 p.c stake in Twitter, the social media platform the place he has over 80 million followers. The acquisition seems to make Mr. Musk Twitter’s largest shareholder, forward of the 8.8 p.c stake owned by the mutual-fund firm Vanguard and dwarfing the two.3 p.c stake of Jack Dorsey, Twitter’s former chief government.
Mr. Musk’s Twitter funding, which he has been accumulating since a minimum of final month, was price about $2.89 billion based mostly on the closing worth of the corporate’s inventory on Friday. However by the tip of Monday, after information of his buy-in despatched Twitter’s share worth hovering greater than 27 p.c, it was price about $3.7 billion. The shares are a fraction of Mr. Musk’s reported $270 billion-plus net worth.
Regardless of his penchant for sharing all the things on Twitter — from enterprise concepts, insults and memes to, this previous weekend, his expertise at a famed Berlin nightclub — Mr. Musk was uncharacteristically mum on the acquisition of the corporate’s shares, a minimum of initially.
“Oh hello lol” he tweeted on Monday with out elaborating after information of his funding had unfold throughout Twitter. Mr. Musk, 50, didn’t reply to a request for remark. Twitter declined to remark.
Mr. Musk has purchased into Twitter at a fragile time for the corporate, which relies in San Francisco. Mr. Dorsey stepped down as chief government in November and plans to depart the corporate’s board when his time period ends this 12 months, after dealing with down an activist shareholder and grappling with criticism from lawmakers and regulators about free speech, censorship and poisonous content material.
Mr. Dorsey handed the reins to Parag Agrawal, Twitter’s chief know-how officer, who cuts a decrease profile in Silicon Valley than Mr. Dorsey did. Mr. Agrawal has reorganized the manager ranks of the corporate. He’s additionally deeply occupied with a “decentralized” model of Twitter, certainly one of Mr. Dorsey’s final pet initiatives on the firm.
Beneath that effort, Twitter would shift on-line energy into the fingers of its customers and problem behemoths like Meta, the proprietor of Fb and Instagram. Twitter is funding an impartial effort to construct a so-called open protocol for social media, weaving cryptocurrency into its app, and opening as much as builders who wish to construct customized options for Twitter.
What precisely Mr. Musk plans to do along with his Twitter stake is unclear. He has criticized the corporate in current weeks for failing in his view to stick to free speech ideas, and he has argued that customers must be allowed to decide on the algorithms that choose the tweets they see, or construct their very own, as an alternative of counting on Twitter to curate posts.
The thought was one Mr. Dorsey championed whereas main Twitter. “The selection of which algorithm to make use of (or not) must be open to everybody,” he stated final month in response to a tweet from Mr. Musk pushing for algorithms that outsiders can construct for the platform.
It’s unclear whether or not Mr. Musk will ask — or be invited — to affix Twitter’s board. He filed a securities doc known as a 13G submitting, indicating that he deliberate for the funding to be passive and that he didn’t intend to pursue management of the corporate.
However Wall Avenue has already began speculating that Mr. Musk may change the standing of his funding, proceed shopping for Twitter shares and even attempt to purchase the corporate outright.
“We might count on this passive stake as simply the beginning of broader conversations with the Twitter board/administration that would in the end result in an lively stake and a possible extra aggressive possession function of Twitter,” Daniel Ives, an analyst at Wedbush Securities, stated on Monday morning.
Steven Davidoff Solomon, a professor on the Faculty of Regulation on the College of California, Berkeley, stated the submitting lets Mr. Musk “form of conceal no matter intent he might need with respect to Twitter.” However, he added, submitting as a “passive investor” with an precise intent to push for management by switching submitting varieties is “fraudulent,” although not often prosecuted and troublesome to show.
Mr. Musk’s lengthy and sophisticated private relationship with Twitter has already gotten him in bother, along with his tweets about Tesla’s funds leading to authorized wranglings with the S.E.C.
If Mr. Musk pushes for change at Twitter, he wouldn’t be the primary agitated investor the corporate has needed to take care of. The activist agency Elliott Administration took a place in Twitter and known as for Mr. Dorsey’s elimination in 2020. It later struck a cope with Twitter that included a $1 billion funding from the non-public fairness agency Silver Lake and introduced on new board members, together with Silver Lake’s co-chief government, Egon Durban. Silver Lake teamed up with Mr. Musk in his efforts to take Tesla private.
Mr. Musk’s checklist of different enterprise ventures runs lengthy. Past Tesla and SpaceX, he’s the founding father of the Boring Firm, a tunnel development providers firm. Including a job to the checklist may irk Tesla shareholders. Within the final two months of final 12 months, Mr. Musk offered round $16 billion of Tesla inventory, equal to roughly 10 p.c of his stake within the electrical car firm.
Executives who’ve juggled media initiatives with different non-public endeavors have generally discovered themselves in politicians’ cross hairs. Former President Donald J. Trump, for instance, took a dim view of Amazon as a result of he disagreed with coverage in The Washington Post, which Jeff Bezos purchased in 2013. Tesla is a big beneficiary of environmental credit, whereas SpaceX pursues authorities contracts.
For Mr. Musk, the funding may increase the amount of noise that he faces on Twitter. Already on Monday, Twitter customers have been inundating the billionaire with requests for an edit button on the social media service and asking him to reinstate sure banned accounts.
Adam Satariano, Jack Ewing and Peter Eavis contributed reporting.
