Tesla CEO Elon Musk acquired a gigantic US$2.89 billion worth of Twitter stocks, or equal to almost 73.5 million shares, after criticizing the company for free speech restrictions two weeks prior. This acquisition makes Musk the largest shareholder in Twitter - taking a 9.2% stake in the digital networking giant. His ownership is more substantial than the 8.8% held by the Vanguard Group, 8.4% held by Morgan Stanley, and 2.3% held by its co-founder Jack Dorsey. On Monday (4/4), Twitter’s stock skyrocketed to 27.1%, adding approximately US$8 billion to its market value, the biggest one-day gain since the social networking platform went public in November 2013. According to Dow Jones Market Data Group, Twitter ended the day with a value of US$40.01 billion, its highest market capitalization since the last quarter of 2021. This demonstrates shareholders’ lack of confidence in the company’s current management and their belief in Musk’s ability to improve the company. Musk’s investment aided the corporation’s recovery after an arduous 2021 comparison to its in-group competitors. At the time of purchase, Musk issued a disclosure stating that he intended to stay neutral and uninvolved in the company’s operations. Meanwhile, a few days later, he made another disclosure to become an active investor and will also take a seat on the board. This will certainly catch the Securities and Exchange Commission (SEC) attention and could inflict issues for Musk.
As a firm believer and an outspoken critic, Musk became one of Twitter’s board of directors, directly appointed by Twitter Chief Executive Officer Parag Agrawal. Musk serves as a class two director and has agreed to own less than 14.9% of Twitter’s stock, with a term expiring at the company’s 2024 annual meeting of stockholders. Musk would pour immense values and ideas to the board, conveyed Agrawal on his tweet (4/5). He will lead a host of strategic initiatives, covering a wide range of possibilities out of the gates for the company that is still striving in a social media arms race, added Dan Inves in a note to investors. Nonetheless, an agreement was signed to make him a passive interest and allow him to work on a futuristic vision for “decentralized” social networking. This would allow users to define their meaning of Free Speech and set the algorithm to their personal preferences. Long before, Dorsey financed Bluesky’s project, an effort to develop a new infrastructure that allows users to control and move their data to other platforms. It was aimed for people to customize the key algorithms that affect their experience on social media. Musk’s investment is believed to come at a key time for the company. Accordingly, Musk is expected to influence Twitter’s potential beyond news and live events. By proposing new features, namely, edit button and bots removal, significant improvements are perceptible, causing a shake-up in the social media.
Elon Musk himself has a fair share of controversies on Twitter while having over 80 million followers. He has been accused of manipulating the market, both the stock market and cryptocurrencies, and profiting heavily. Many of his followers saw this opportunity and followed him to profit, while others incurred heavy losses. This also led to lawsuits from investors and regulators, resulting in million-dollar fines. Lately, he has been very vocal on Freedom of Speech matters on Twitter which was politically controversial. His futuristic vision curated a transparent and public core technology, with oversight and input from coders globally. This will allow users to customize their social media feeds and acceptable speech published. Musk opposes Twitter's current terms of service and mass censorship of anything that contradicts them. At the same time, Musk has dabbled in controlling decentralization technologies. However, it is unclear whether a decentralized Twitter could come together. It could take years to emerge due to the complicated revamping of the entire platform. After all, by acquiring a seat on Twitter, he now has the leverage to shape Twitter to his liking and gain more influence on the social media platform.
New York Times
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