December 4, 2022

OsoyoosToday

Complete Canadian News World

Musk takes 9% stake in Twitter to become the largest shareholder, and begins voting on the edit button

Musk takes 9% stake in Twitter to become the largest shareholder, and begins voting on the edit button

  • The stake is worth approximately $3 billion
  • Twitter shares rose 27% to close at $49.97
  • Strong response to a survey caught on the edit button

April 4 (Reuters) – Tesla Inc (TSLA.O) Chairman Elon Musk on Monday disclosed a 9.2% stake in Twitter Inc (TWTR.N)which is worth nearly $3 billion, which made him the largest shareholder of the micro-blogging site and led to a rise of more than 27% in the company’s shares.

Musk’s move, revealed in a regulatory filing, follows a tweet in which he said he was “seriously considering” building a new social media platform, while questioning Twitter’s commitment to free speech.

File started as vote Asking Twitter users if they want an edit button, a long-awaited feature the social media platform is working on. Next, CEO Parag Agrawal urged users to “vote carefully”.

Register now to get free unlimited access to Reuters.com

In less than three hours after the survey began, more than 1.2 million users had voted, and more than 75% of them supported the edit option.

Last week, in another survey, Musk asked if the Twitter alogrithm should be open source. More than 82% of users said yes, while former CEO Jack Dorsey said, “The choice of which algorithm to use (or not to use) should be open to everyone.”

A prolific Twitter user, Musk has more than 80 million followers since joining the site in 2009, and has used the platform to make several announcements, including teasing a special deal for Tesla that plunged him into hot water with regulators.

READ  Bird flu has driven up egg prices across the United States

But recently, the world’s richest person has criticized the social media platform and its policies, and recently conducted a Twitter poll asking users if they think the platform adheres to the principle of freedom of expression, for which more than 70% voted “no”. Read more

In December, Musk put out a meme comparing CEO Agrawal to Soviet dictator Joseph Stalin and featured Jack Dorsey as a close associate who was later executed.

Twitter’s latest quarterly results and less-than-expected user additions have cast doubt on its growth prospects, even as it pursues big projects like voice chat rooms and newsletters to end a long-running slump.

“It’s really sending a message to Twitter…Having a meaningful stake in the company will keep them on their toes, because that passive stake can very quickly become an active stake,” said Thomas Hayes, managing director at Great Hill Capital LLC.

Musk – who, according to Forbes magazine, has a net worth of about $300 billion – has been reducing his stake in Tesla since November, when he said he would rejoice at his 10% ownership in the electric car maker. He has already sold $16.4 billion worth of stock since then.

On Monday, a regulatory filing showed that Musk owns 73.5 million shares of Twitter, owned by Elon Musk’s salvageable fund, which is the sole trustee of it. Vanguard is the second largest contributor to Twitter, with an 8.79% stake, according to Refinitiv data.

READ  Has the gasoline price shock destroyed demand so far? Where will gasoline prices go from here?

Twitter shares rose 27.1% Monday to close at $49.97. The stock, which is down 38% in the past 12 months to Friday’s close, added as much as $8.38 billion to its market capitalization, which is now $39.3 billion.

buying?

“Musque’s actual investment represents a very small percentage of his wealth and a blanket acquisition should not be ruled out,” CFRA Research analyst Angelo Zino wrote in a client note.

Ryan Jacob, CEO of Jacob Asset Management, said a stake in Twitter is more likely to produce positive results for shareholders than negative results, and said Twitter is one of the fund’s biggest holdings.

“If (Musk) decides to take an active stance and Twitter becomes private, it will probably be at a higher price than it is now,” he said. “If it gets other companies interested (acquiring Twitter), it will probably be at a higher price than the current price.”

Musk previously made early-stage investments in companies, including online payment processor Stripe Inc and artificial intelligence company Vicarious.

He is also the founder and CEO of SpaceX, and leads infrastructure startup Neuralink and The Boring Company.

Twitter was a target for activist investor Elliott Management Corp in 2020, when the hedge fund argued that the social networking company’s then-president and co-founder, Jack Dorsey, was paying little attention to Twitter while also running what was then called Square Inc. (SQ.N).

Dorsey, who owns a more than 2% stake in Twitter, resigned as CEO and Chairman of the Board in November last year, handing the reins to the company’s veteran Paraj Agrawal.

READ  Uniqlo owner stays in Russia as Netflix and AMEX cut ties

Meanwhile, Musk and Dorsey have found common ground to reject the so-called Web3, an ambiguous term for a utopian version of the decentralized Internet. Read more

Register now to get free unlimited access to Reuters.com

Additional reporting by Nivedita Balu, Eva Matthews, Akash Sriram, Praveen Paramasivam and Maria Bonizeth in Bengaluru; Additional reporting by Sheila Dang in Dallas and Hyun Joo Jin in San Francisco. Editing by Anil de Silva, Matthew Lewis, Rashmi Aish and Aaron Koeure

Our criteria: Thomson Reuters Trust Principles.