Elon Musk has bought a 9.2 percent stake in Twitter, becoming the largest shareholder in the micro-blogging site. It was revealed on Monday through a filing at Security and Exchange Commission.
The filing showed that the Space X boss owns 73.5 million Twitter shares, valuing his passive stake in the company at up to $2.9 billion based on the stock's Friday close. The Elon Musk Revocable Trust owns these shares and he is the only trustee in this.
The revelation has boosted Twitter shares and these are now rallying in the stock market. The stock jumped by over 25 percent in pre-market trading on Monday to $49.10 a share.
What Forced Musk to Buy 9.2% Stake in Twitter?
So far, Musk and his company have not revealed any purpose of the purchase. However, the Tesla boss is a fierce critic of Twitter policies and last month he revealed that he is considering creating a new social media platform. The billionaire influencer even conducted an online survey asking users, "Is Twitter adhering to the principles of free speech?" to which nearly 70 % of the users responded "NO" on the survey.
"Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done? Is the new Platform needed," Musk tweeted after the survey results stating that he is giving serious thought to it.
But i's now clear that Musk has realized Twitter is and possibly in near future will be the most popular social media platform. Therefore, he ended up becoming the largest shareholder in the company.
How Was The Purchase Revealed?
Experts have revealed that stakes less than 10% in any company are considered to be passive and by this investment, Musk could now have an active role in the operations of Twitter.
The purchase was revealed through a filing as if someone buys more than a 5% stake of any company, they are bound to disclose it to the Security and Exchange Commission.
Musk has been extremely active on Twitter and his suggestions for investment and crypto readings are followed by many as 80 million Twitter followers, far more than any CEO.
According to the Forbes Real Time Billionaire's List, Musk is currently the richest person in the world with a net worth of $287.6 billion and Jeff Bezos is second with a net worth of $189.3 billion in the list.
Musk now owns four times more shares in the company when compared to Twitter founder Jack Dorsey, who owns a 2.25 percent stake in the company.