The move comes close on the heels of his tweet that he was giving a “serious thought” to building a new social media platform, while questioning Twitter’s commitment to free speech.
A regulatory filing on Monday disclosed that Musk owns 73.5 million Twitter shares, which are held by the Elon Musk Revocable Trust, of which he is the sole trustee.
Following the announcement, Twitter shares rose to 27.1% on Monday to close at $49.97. The stock, which had fallen 38% in the past 12 months through Friday’s close, on Monday added as much as $8.38 billion to its market capitalization, which now stands at $39.3 billion.
According to Ryan Jacob, chief executive officer of Jacob Asset Management, the stake in Twitter is more likely to result in positive outcomes for shareholders than negative ones, who said Twitter is one of the fund’s largest holdings.
Of late, however, the world’s richest person has been critical of the social media platform and its policies, and recently ran a Twitter poll asking users if they believed the platform adheres to the principle of free speech, to which over 70% voted “no”
“It does send a message to Twitter … having a meaningful stake in the company will keep them on their toes, because that passive stake could very quickly become an active stake,” said Thomas Hayes, managing member at Great Hill Capital LLC.
Musk also started a poll asking Twitter users if they want an edit button feature on which the social media platform has been working.
Musk is a regular Twitter user with over 80 million followers since joining the site in 2009 and has used the platform to make several announcements.
Musk has previously made early-stage investments in companies, including online payment processor Stripe Inc and artificial intelligence firm Vicarious.
He is also the founder and chief executive officer of SpaceX, and leads brain-chip startup Neuralink and infrastructure firm the Boring Company.
Twitter was the target of activist investor Elliott Management Corp in 2020, when the hedge fund argued the social networking company’s then-boss and co-founder, Jack Dorsey, was paying too little attention to Twitter while also running what was then called Square Inc (SQ.N). Dorsey, who owns a stake of more than 2% in Twitter, stepped down as CEO and chairman in November last year, handing the reins to company veteran Parag Agrawal.