Billionaire Elon Musk is set to become Twitter‘s largest shareholder after questioning whether the social media platform needs a new competitor.
Mr. Musk has taken a 9.2% stake in Twitter, a purchase of nearly 73.5 million shares, according to a regulatory filing on Monday, which corresponds to an estimated value of $2.9 billion. Twitter‘s stock rose 25% during trading on Monday upon news of the investment, per CNBC.
The electric vehicle and space technology tycoon’s reason for his Twitter investment is not clear, but industry analysts have speculated that he has more ambitious aspirations. Wedbush Securities managing director Dan Ives said he thinks Mr. Musk may engineer an effort to take control of the company.
“This morning Elon Musk revealed he now owns a 9.2% passive stake in Twitter,” Mr. Ives tweeted. “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; more aggressive ownership role of Twitter.”
Mr. Musk‘s influence over fellow stockholders will be on display next month at Twitter‘s annual meeting of stockholders. The May 25 meeting’s agenda includes several items, such as elections for the company’s board of directors.
Mr. Musk has relied upon Twitter users to inform his decisions. Last month, he polled his Twitter following about if they believed Twitter was committed to free speech. When they overwhelmingly answered no, Mr. Musk responded with open-ended questions about what should be done and whether a new platform is needed.
Whether Mr. Musk pursues an internal overhaul at Twitter or the development of an external alternative remains to be seen.
He has cultivated a reputation as an outsider and outlaw through his usage of Twitter: Mr. Musk‘s tweets have sparked a federal investigation, and he has met with Twitter‘s outcasts such as the satirists at The Babylon Bee who were subsequently suspended by Twitter.
The Securities and Exchange Commission has disclosed it is investigating Mr. Musk‘s November 2021 tweets about whether to sell his stake in the electric vehicle company Tesla. He and Tesla previously agreed in 2018 to pay multimillion-dollar civil fines and have certain tweets approved by a corporate lawyer.
While Mr. Musk looks to get inside Twitter, some other outsiders are struggling to find their footing as competitors.
Former President Donald Trump’s Truth Social platform suffered the departure of two executives tasked with overseeing technology and product development, according to Reuters on Monday.
Truth Social’s parent company did not respond to requests for comment.
One of Mr. Trump’s most loyal followers is also unhappy with their experience on his platform. Longtime Trump confidante Roger Stone has complained that he is being censored on the platform, according to the Daily Beast.
As Mr. Musk, Mr. Trump and others look for avenues to challenge Twitter‘s prominence in the microblogging market, Twitter co-founder Jack Dorsey has expressed regret for the havoc he views himself as helping to create.
Mr. Dorsey announced his exit as Twitter CEO last year, and his term on the company’s board expires in 2022, according to a regulatory filing.
“Centralizing discovery and identity into corporations really damaged the internet,” Mr. Dorsey said in a tweet on Saturday. “I realize I’m partially to blame, and regret it.”
• This story is based in part on wire service reports.