• Thu. Jul 7th, 2022

Tesla boss Elon Musk buys stake in Twitter before openly criticising the social media website


Apr 5, 2022

Tesla CEO Elon Musk has acquired a 9 per cent stake in Twitter, to become its largest shareholder at a time when he is questioning the social media platform’s dedication to free speech and the First Amendment.

Mr Musk purchased 73,486,938 shares on March 14, a filing revealed on Monday.

Twitter’s stock surged nearly 30 per cent on Monday. Since March 14, the date listed on the filing by Twitter, its shares were up nearly 50 per cent, meaning that Musk’s investment has paid handsomely, so far.

Twitter did not immediately respond to a request for comment.

With more than 80 million Twitter followers, Mr Musk is an active user of the platform.

However, on March 25, he tweeted that he was giving “serious thought'” to creating a new platform, asking his followers if they thought Twitter encouraged free speech.

“Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?” he wrote.

He then asked in another tweet on March 27: “Is a new platform needed?”

Mr Musk has previously been at loggerheads with regulators about his use of Twitter.

Industry analysts and legal experts say Musk could begin advocating for changes at Twitter immediately if he chooses.

In a note to investors, analyst for research company CFRA Angelo Zino wrote that Twitter could be viewed as an acquisition target because the value of its shares have been falling since early last year.

Jack Dorsey stepped down as Twitter’s chief executive in November.

Mr Musk’s stake in Twitter is now more than four times the size of Mr Dorsey’s, who co-founded the San Francisco company and had been its largest individual shareholder.

“Musk’s actual investment is a very small percentage of his wealth, and an all-out buyout should not be ruled out,” wrote Mr Zino, who covers Twitter and social media.

Mr Musk could see Twitter as an investment with big growth ahead, or he could have non-investment reasons for the purchase, such as buying to make sure the platform doesn’t restrain his speech, said Erik Gordon, a law and business professor at the University of Michigan.

“What he could be worried about is if enough of his tweets start to look like disinformation, that Twitter says, ‘We’re doing our job against disinformation’,'” Professor Gordon said.

No chief executive would refuse to take a call from the company’s top shareholder, so the purchase gives Mr Musk access to Twitter’s top management, he said.

Mr Musk has not spoken specifically about how he would change rules at Twitter, but the social media platform’s history of suspensions and bans is well documented.

Former President Donald Trump was banned from Twitter and other top social media platforms after the January 6 Capitol riot last year that critics accused Mr Trump of inciting.

The ban has raised difficult questions about free speech in a social media industry dominated by a few tech giants, an issue that Mr Trump and conservative media have seized upon.

There was broad praise for Mr Musk from those circles Monday.

Dispute with SEC over Twitter
Last month, Mr Musk asked a US judge to nullify a subpoena from securities regulators and discard a 2018 court agreement in which he had to have pre-approval of his Twitter posts.

His lawyer has contended in court motions that the SEC is infringing on the Tesla CEO’s First Amendment rights.

In October of 2018, Musk and Tesla agreed to pay US$40 million ($53 million) in civil fines and for Musk to have his tweets approved by a corporate lawyer after he tweeted about having the money to take Tesla private at US$420 per share.

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