By Ashley Young-
Mega rich billionaire Elon Musk has taken an almost $3bn (£2.3bn) stake in Twitter to become the social media platform’s largest shareholder.
The incredible entrepreneur took a 9.2% stake in Twitter, a US securities filing. The news sent Twitter shares soaring about 25% in pre-market trading.
The world’s richest man has built a 9.2% stake in Twitter, according to filings made to the US Securities and Exchange Commission (SEC) on Monday.
The boss of Tesla and SpaceX, has over 80 million followers ranks in the top 10 most popular Twitter users globally, paid $2.89bn for the stake at Twitter’s closing share price on Friday.
Musk recently asked a federal judge to nullify a subpoena from securities regulators and throw out a 2018 court agreement in which Musk had to have someone pre-approve his posts on Twitter.
US securities regulators claimed they had legal authority to subpoena Tesla and Musk about his tweets, and that Musk’s move to throw out a 2018 court agreement that his tweets be pre-approved is not valid.
The SEC responded in a court motion, insisting it has legal authority to subpoena Tesla and Musk about his tweets, and that Musk’s move to throw out the settlement is not valid.
The SEC disclosed that it is investigating Musk’s Nov. 6, 2021 tweets that asked followers whether he should sell 10% of his Tesla stake. The commission confirmed that it issued administrative subpoenas while investigating whether Musk and Tesla are complying with disclosure controls in the 2018 agreement.
The commission also is investigating whether Tesla described accurately in public filings with the agency whether it complied with the controls.
The commission maintains that the subpoenas were lawful, and that Musk isn’t following proper legal procedure to challenge them. SEC attorney Melissa Armstrong called Musk’s challenge “frivolous,” and pointed out that Musk and Tesla agreed to have his tweets pre-approved by other company officials.
“Courts have long recognized that ‘congress has vested the SEC with broad authority to conduct investigations into possible violations of federal securities laws and to demand production of evidence relevant to such investigations,’” Armstrong wrote.
Shares in twitter increased by over 26%, adding more than $8bn to its $31.5bn market value before Musk’s interest was made public. After the stock price jump Musk’s shares are now worth about $3.6bn.
Only last week, the Musk expressed an interest in building his own social media platform, after questioning twitter’s openness to free speech.
Late last month Musk asked his followers whether they thought the social media platform encouraged free speech.
“Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?”
He then asked: “Is a new platform needed?”
The posts of the world renowned ambitious genius has also led to accusations of stock manipulation, regularly sharing polls and information about his companies online.
In August 2018, he wrote that he was ‘considering taking Tesla private at $420. Funding secured,’ a nod to Musk’s well-known interest in marijuana.
The issue was, he didn’t actually have funding secured – but the stock price soared at the time, and it was later revealed that Musk apparently wrote the tweet because he ‘thought his girlfriend would “find it funny.”‘
He later tweeted how ‘high’ the stock had gone later in 2019 when it did, in fact, hit $420 a share.
Musk now holds a stake more than four times the 2.25% holding of the Twitter co-founder Jack Dorsey.
Musk’s brushes with twitter and about the social media platform has been very eventful over the last few years.
He once asked a federal judge to nullify a subpoena from securities regulators and throw out a 2018 court agreement in which Musk had to have someone pre-approve his posts on Twitter.
Musk is still the CEO of Square Inc, the hugely successful financial payments company that he co-founded in 2010, and is the sixth largest shareholder in Twitter.
US securities regulators said they had legal authority to subpoena Tesla and Musk about his tweets, and that Musk’s move to throw out a 2018 court agreement that his tweets be pre-approved is not valid.
Other Social Media Shares Go Up
Shares of other social media firms, including Meta Platforms and Snapchat owner Snap Inc, were also trading higher.
Musk’s stake in Twitter is considered a passive investment, which means he is a long-term investor that’s looking to minimize his buying and selling of the shares.
‘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,’ Dan Ives of WedBush Securities wrote in a client note early Monday.
Shares of other social media firms, including Meta Platforms and Snapchat owner Snap Inc, were also trading higher.
Musk’s stake in Twitter is considered a passive investment, which means he is a long-term investor that’s looking to minimize his buying and selling of the shares.
‘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,’ Dan Ives of WedBush Securities wrote in a client note early Monday.
Musk’s many questionable Twitter moments include calling Vernon Unsworth, a diver who helped rescue a team of young football players stuck in a flooded cave in T
The stake makes him one of the largest shareholders in the company and is more than four times the 2.25% holding of Twitter founder Jack Dorsey.
Musk is a regular Twitter user with over 80 million followers, although recently he said he is giving “serious thought” to building a new social media platform.
He regularly uses Twitter to share updates from the companies he owns – including SpaceX and Neuralink. He is also known for sharing memes, adding to his popularity among fans.
Last year he tweeted in response to a claim, made by the head of the UN World Food Programme (WFP), that just 2% of Mr Musk’s wealth could help to solve world hunger.
In October, Mr Musk said he would sell $6bn in Tesla stock and donate it to the WFP, provided it could describe “exactly how $6bn will solve world hunger”.
Mr 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.
A fortnight ago, Elon Musk sold all seven of his homes in California for $128million, after vowing to “own no house”, according to US media reports.
The Tesla and SpaceX CEO, 50, is now residing in a small rental home, believed to be worth $50,000, near his aerospace company in Boca Chica, Texas, after selling his seven properties.
The move, which will see the billionaire rake in an estimated $25m in profits, comes just days after the billionaire’s former partner Grimes, 33, claimed Mr Musk led a minimalistic life and at times “lived below the poverty line”.
Among the properties Mr Musk sold was the former home of Willy Wonka & The Chocolate Factory actor Gene Wilder – who died at the age of 83 in 2016.He agreed to sell the home to the Hollywood star’s nephew Jordan Walker-Pearlman in order for the property to remain within the family and on the condition that it would not be torn down or “lose any of its soul”.
The billionaire also sold one of his Bel Air mansions to Chinese billionaire William Ding, who paid $29m for the lavish property.
Four other homes in Bel Air were sold to the Los Angeles property developer Ardie Tavangarian.