Elon Musk takes a 9.2% stake in Twitter, and shares skyrocket

Elon Musk, Tesla’s chief executive and one of the most followed users on Twitter, bought a 9.2 percent stake in the social media giant, becoming one of its top shareholders just weeks after questioning the platform’s commitment to free speech, according to a regulatory filing Monday.

Twitter shares rose 28 percent in trading after the Securities and Exchange Commission filing showed Musk snapped up more than 73 million shares, worth $2.89 billion based on Twitter’s closing price Friday. Musk’s investment in Twitter now dwarfs that of founder Jack Dorsey, who owns a 2.25 percent stake.

Musk tweeted later Monday, “Oh hi lol”, greeting users of the social media app where he makes many of his most erratic pronouncements, including news about Tesla, where he’s CEO.

Dan Ives, managing director at Wedbush Securities, said Musk’s passive stake could be just the beginning. Rather than starting a competing social media platform, as some predicted after the poll, “It looks like Elon has his eyes laser set on Twitter.”

Ives predicted Musk, the world’s richest man, will eventually pursue an active stake, positioning him to take “more aggressive ownership role” in the company. “We view this move as Musk just further building out his tentacles,” Ives said Monday in comments emailed to The Washington Post.

Tesla did not immediately respond to a request for comment from The Washington Post. The company does not typically respond to media requests after disbanding its public relations team in 2020.

In late March, Musk questioned whether Twitter “rigorously adheres” to the principles of free speech in a poll to his more than 80 million followers.

“Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy,” he tweeted,

He then asked: “Is a new platform needed?”

Musk sold billions worth of Tesla shares in 2021, making much of his wealth - previously tied up in Tesla stock - liquid for the first time. Musk sold the shares after taking to Twitter to poll his users on whether he should sell 10 percent of his shares, though a trading plan that would have seen him sell much of the stock had been adopted weeks earlier, putting the purpose of the poll into question.

Earlier that year, Musk seemingly took aim at Twitter’s decision to ban former president Donald Trump, writing: “A lot of people are going to be super unhappy with West Coast high tech as the de facto arbiter of free speech.”

Trump was booted from the platform following the Jan. 6 Capitol riot, citing the risk of further violence.

Musk recently accused the SEC of trying to “chill his exercise of First Amendment rights” while asking a judge to throw out a 2018 settlement agreement governing his tweets, alleging he felt boxed in by multiple sources of pressure at the time and he entered into it to protect Tesla shareholders.

The settlement stemmed from a tweet in which Musk said he had “funding secured” to take Tesla private at $420 a share. Later, Musk clarified that the tweet had been a joke. He said he’d chosen the number $420 “because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend ‘would find it funny, which admittedly is not a great reason to pick a price,’ " according to the SEC complaint.

The joke nonetheless caused Tesla’s stock to skyrocket, and Musk and Tesla were each fined $20 million. Musk additionally had to step down as Tesla board chairman and agreed to have his potentially market-moving communications vetted by an approved securities lawyer.

“Tesla was a less mature company and the SEC’s action stood to jeopardize the company’s financing,” Musk said in a recent legal filing. “Defending against the SEC’s action through protracted litigation was not in the interests of the company and its shareholders. As Tesla’s CEO and Chairman at the time, I perceived that the company and its shareholders would be placed at undue risk unless I settled the matter promptly.”

At the time, Musk said the $20 million weed joke was “worth it.” Back then, he only had 22 million followers.

The Tesla chief is very active on Twitter, where he has tweeted more than 17,300 times. He averages 125,181 likes per tweet, according to Socialtracker.