Earlier this week, it was revealed that Elon Musk has been buying Twitter shares like there’s no tomorrow. The eccentric billionaire is now the social media platform’s biggest shareholder.
So, what else do we know about Musk’s interest in Twitter? And why does his recent investment choice matter? Let’s take a look.
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Who is Elon Musk?
Elon Musk is an engineer and technology entrepreneur best known for his involvement in PayPal, SpaceX, DeepMind Technologies, Tesla and The Boring Company.
Recent estimates suggest the South African is worth over $260 billion (£200 billion), making him the world’s richest person.
Unlike some other billionaires, Musk is typically outspoken and is very much a media personality. From suggesting humans will soon live on Mars and presenting the prime-time US TV show Saturday Night Live to sparking controversy on the world’s biggest podcast, Musk’s name is never far from the headlines.
What do we know about Musk’s stake in Twitter?
It has been revealed that Elon Musk has been ‘passively’ purchasing Twitter shares. The billionaire currently owns 73.5 million shares in the social media platform, which is equivalent to a 9.2% stake in the company. Musk’s holding now makes him Twitter’s largest shareholder.
Following the news, the social media giant has announced Musk will join Twitter’s board as a Class II director.
Twitter CEO Parag Agrawal welcomed Musk to his new role. He said: “Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board.
“He’s both a passionate believer and intense critic of the service, which is exactly what we need on Twitter, and in the boardroom, to make us stronger in the long term. Welcome, Elon!”
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Why does Elon Musk’s big Twitter stake matter?
Elon Musk is a prolific user of Twitter. He regularly shares his thoughts, opinions and concerns with his 80 million followers. While a popular personality, some of Musk’s critics have accused him of market manipulation in the past, following his Tweets commenting on the future of his Tesla organisation.
Despite the fact that not everyone is a fan, it’s fair to say that Musk remains a fan of Twitter. It could also be said that his recent purchase of millions of shares suggests he thinks the platform still has room to grow.
The markets clearly agree. Following the revelation that Musk has been buying Twitter shares, the social media’s share price rocketed by 30%. This has led to Musk’s stake alone soaring by $3 billion.
One Twitter share now stands at $50.77 as of Thursday 7 April. Interestingly, it has remained more or less at this level since news broke about Musk’s significant holding.
What are the concerns about Musk buying Twitter shares?
Despite helping the Twitter share price to skyrocket, some users are far from happy about Musk’s latest investment decision. That’s because Musk has previously suggested Twitter should allow more free speech. This could suggest the billionaire wants to relax its existing censorship rules. Musk has even previously suggested that he might set up his own social media platform.
Other critics have also expressed concern about Musk wanting to further increase his stake in Twitter to have more of an influence on how the company is run. However, it’s worth knowing that his agreement to join the board limits the number of shares he can buy. That’s because, under the agreement, Musk cannot hold more than 14.9% of outstanding Twitter stock during his term, and for 90 days after.
How can you buy shares in Twitter?
Twitter Inc is listed on the New York Stock Exchange. So, if you wish to buy shares in the company, then you’ll have to do so through a share dealing account that allows you to buy US stocks. IG and Saxo Markets are two providers that allow this.
Bear in mind that when it comes to buying US shares, you’ll have to complete a W-8BEN form to cover US taxes.
As with any investing, remember that the value of your investment can fall as well as rise. For more need-to-knows, take a look at our investing basics guide.
