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
Elon Musk, who has over 80.6 million Twitter followers, has gotten himself into hot water with some of his tweets in the last few years.
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.