Tesla and SpaceX CEO Elon Musk has purchased 73,486,938 shares of Twitter Inc. (NYSE: TWTR) for a 9.2% passive stake, making him the largest individual shareholder of the micro-blogging site.
This new development came out in the public domain after the release of the latest SEC filing of Twitter.
Twitter and Elon Musk signed a letter agreement on April 4, 2022, under which the company will appoint Musk to its board of directors to serve as a Class II director for a term ending at the Company’s 2024 Annual Meeting of Stockholders.
However, Elon, either individually or as part of a group, will not be allowed to own more than 14.9% of Twitter’s common stock outstanding at any time during his term on the Board.
Twitter’s share has gone up by 28% following the release of the Securities and Exchange Commission (SEC) 13G filing on April 4, 2022. Elon Musk’s stake in Twitter is worth $2.89 billion, based on the closing price Friday.
For those unfamiliar with the term, “passive investment” refers to a shareholder who does not actively participate in the company’s management. Despite the fact that it is considered a passive investment, investors were bidding higher on the shares in the hopes of a merger or acquisition.
Elon Musk’s Controversial Tweets
The news of the Twitter stock purchase comes less than two weeks after Elon Musk criticized the micro-blogging platform by conducting a poll on whether it adheres to free speech principles.
Musk also asked Twitter users whether a new platform is needed?
In November 2021, Musk asked his Twitter followers whether it was appropriate to sell 10% shares of Tesla. Surprisingly, the very next day, the company’s stock plummeted.
In 2018, The Securities and Exchange Commission (SEC) has slapped Musk with a fine of $20 million over his series of misleading tweets.
Elon Musk Twitter Investment: A Planned Move?
It is surprising how someone, who has long been criticized for his tweets and paid a hefty penalty in the past, decided to become the largest shareholder of Twitter? Is this Elon Musk’s first attempt to acquire Twitter, or has the Tesla CEO sought to make a deal with the company before?
Well, no one knows as there was no rumour or announcement regarding Elon Musk investment in Twitter before it actually happened.