Elon Musk is gold for Twitter investors, stock soars from 9.2% stake

Elon Musk is gold for Twitter investors, stock soars from 9.2% stake

Twitter investors have Elon Musk to thank, who went from an active user to the company’s largest shareholder after being vexed by the social media giant’s conflicting free speech principles.

It’s been just under two weeks since the so-called ‘free speech absolutist’ took a surprise 9.2% stake in the social media platform. This month, Twitter shares have climbed almost 17%, while the S&P 500 has fallen 2% over the same period.

TeleprinterSecurityLastSwitchSwitch %
TWTRTWITTER INC.45.85+1.37+3.07%
SP500S&P5004446.59+49.14+1.12%

Since the stake disclosure, Musk has kept Twitter management and Wall Street investors eager to learn more about his plans for the company.

Thursday, they could have clues about what’s next. Musk will be interviewed by TED Talks Manager Chris Anderson and may address his possible next move with Twitter, adding to what has already been an orderly timeline.

ELON MUSK FACES SHAREHOLDER LAW FOR DELAY IN DISCLOSURE OF TWITTER OWNERSHIP

January 31: Musk starts buying Twitter shares

According to a 13D classification with the Securities and Exchange Commission, Musk made a series of cash purchases of Twitter stock between Jan. 31 and April 1. The purchases ranged from $32.80 per share to $40.30 per share. In total, he bought 73.5 million shares for about $2.9 billion.

March 14: Musk reaches 5% threshold requiring disclosure of his stake

The SEC requires anyone who acquires more than 5% of a company’s common stock to disclose their holdings within 10 calendar days. Filing 13D shows Musk appears to have exceeded the 5% threshold on March 14, but he did not disclose the stake until April 4.

ELON MUSK CANCEL TOWN HALL WITH TWITTER EMPLOYEES AFTER REFUSING TWITTER BOARD SEAT

March 25-26: Musk challenges Twitter on freedom of expression

On March 25, Musk tweeted out a poll asking his followers if Twitter “rigorously adheres” to free speech principles. About 70.4% voted no, while 29.6% voted yes.

A day later, he asked his followers what to do to fix the situation and raised the possibility of launching a new platform.

April 5: Twitter announces Musk’s appointment to board

On April 5, a day after news broke of Musk’s 9.2% stake, Twitter CEO Parag Agrawal announced his intention to appoint Musk to the company’s board.

“Excited to share that we are appointing @elonmusk to our board! Through conversations with Elon over the past few weeks, it has become clear to us that he will bring great value to our board,” said tweeted Agrawal. “He is both a passionate believer and intense critic of service, which is exactly what we need on @Twitter and in the boardroom, to make us stronger in the long run. Welcome Elon!”

Musk responded to the tweet, noting that he looks forward to helping the board “make meaningful improvements to Twitter in the months ahead!”

ELON MUSK WILL MAKE MORE NOISE ON TWITTER DESPITE THE ABSENCE OF A BOARD MEMBER

April 6: Musk signals he could take a more active role on Twitter

On April 6, Musk filed 13D with the SEC, which outlined specific details of his Twitter stock purchases and suggested he might take a more active role on Twitter. The stake was originally disclosed in a 13G, which is generally reserved for passive investors.

He also pointed out that he would not be allowed to own more than 14.9% of Twitter shares while serving on the board or for 90 days thereafter. The filing notes that Musk’s board term would expire at Twitter’s annual meeting in 2024.

April 9: Musk declines his seat on the board of directors

On April 9, Musk revealed in a new update to his 13D filing that he had declined to join Twitter’s board. The filing also flagged several ways he could exert influence on Twitter in the future.

The filing says Musk may engage in discussions with Twitter’s board or management team “regarding, including, but not limited to, potential business combinations and strategic alternatives, business transactions, capital structure, governance, management”, strategy or matters relating to it. He adds that Musk may express his views directly to board members or executives “and/or to the public via social media or other channels regarding [Twitter’s] commercial offers, products and services. »

“Elon’s appointment to the board was scheduled to become officially effective on 4/9, but Elon shared that morning that he will no longer be joining the board,” Agrawal said in a memo to employees and a statement. subsequent tweet on April 10. “I believe this is for the best.”

While the filing notes that Musk “has no current plans or intentions that would result in or relate to any of the transactions described,” it cautions that plans could change based on numerous factors, including “the relative attractiveness of alternative business and investment opportunities.”

Going forward, Wedbush Securities analyst Dan Ives thinks Musk could be gearing up for a “Game of Thrones” style battle against Twitter, with “the high likelihood that Elon will take a more hostile stance towards Twitter and further strengthens his active participation in the company”. “

“Musk no longer joining Twitter’s board could lead to a host of scenarios, including 1) joining a private equity partner and forcing major strategic changes at Twitter and/or a sale, 2 ) create more noise and angst for Twitter’s board/executives with various proposed platform changes, or 3) does Musk say “game over” cut his bet and go home “, Ives wrote in a note to clients on Monday. “In our opinion, his likely 1 or 2 paths with the street now focus on Musk’s next poker move (next Twitter filing/participation) in this ongoing soap opera between Elon and Twitter.”

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Musk’s Ted Talk is scheduled to take place between 11:45 a.m. ET and 2:30 p.m. ET on Thursday.

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