R “Ray” Wang, CEO of Constellation Research, comments on Elon Musk joining Twitter’s board of directors.
Elon Musk announced this week that he had bought a sizable chunk of Twitter stock, becoming the company’s largest shareholder a week after hinting that he planned to shake up the social media industry.
The Tesla boss is a frequent user and longtime critic of the platform, which he previously accused of stifling freedom of expression.
The disclosure of his stake on Monday came shortly after he teased on Twitter the possibility of creating a new social media platform, telling his more than 80 million followers that he was “seriously considering” the idea, without giving up his stake reveal Twitter.
ELON MUSK ACQUIRES STAKE IN TWITTER AFTER REVIEWING HIS APPROACH TO ‘FREE SPEECH’
In an accompanying poll, Musk asked his followers if they thought Twitter “rigorously upheld” the principle of free speech. “The consequences of this survey will be important,” he added. “Please vote carefully.”
Tesla CEO Elon Musk tours the plant of the future Tesla Gigafactory foundry in Gruenheide near Berlin, Germany, 13 August 2021. (Patrick Pleul – Pool/Getty Images/Getty Images)
Since then, after several weeks of talks, Twitter CEO Parag Agrawal has announced that Musk will join the company’s board of directors. Musk tweeted that he hopes to make “significant improvements” to Twitter in the coming months with the new role.
Here’s everything we know so far on the matter:
How many shares does Musk own?
Musk announced Monday that he had acquired a 9.2% stake in Twitter in an SEC filing that investors must file if they own more than 5% of a company. The filing, dated March 14, revealed Musk bought about 73.5 million shares for about $2.9 billion. Those shares are now worth around $3.7 billion.
Is Musk Now the Controlling Shareholder of Twitter?
No. Though Musk is the company’s largest shareholder, he doesn’t own a controlling stake — which would mean he owns and controls at least 50% of Twitter’s stock.
Still, the importance of a 9.2% stake should not be overlooked.
“It looks like Elon lasered his eyes on Twitter,” Wedbush analyst Dan Ives said in a research note. He said the state could eventually lead to a “more aggressive ownership role.”
Who are the other top shareholders?
According to data from FactSet, Musk’s stake knocked out the Vanguard Group from the top stockholders’ spot to number two. The Vanguard Group owns an 8.4% stake in the company.
In this photo illustration the logo of Twitter is seen seen on a smartphone on March 10, 2022 in Berlin, Germany. (Thomas Trutschel/Photothek via Getty Images/Getty Images)
Morgan Stanley Investment Management, meanwhile, fell to No. 3 with shares of 8.1%.
Twitter founder and former CEO Jack Dorsey is the only other individual shareholder in the top 10. At number 7, he holds a 2.25% stake in the company, a position that’s nearly $200 million more valuable after Musk sold his announced purchase.
What does his purchase mean for Twitter?
Agrawal announced Tuesday that Musk will join the company’s board of directors.
“He is 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 run,” Agrawal tweeted.
Musk responded that he “looks forward to working with the Parag & Twitter board of directors to make significant improvements to Twitter over the coming months!”
CLICK HERE TO READ MORE ABOUT FOX BUSINESS
Since then, Musk has asked his followers on Twitter to vote on whether the company should add the ability for users to edit tweets after they’ve been posted. More than 73% of 4.4 million respondents voted yes.
The following day, the company said it had been working on the feature since last year. It added: “No, we didn’t get the idea from a survey.”
How long will Musk be on the board?
Musk’s two-year term on the board expires in 2024. During his tenure, Musk’s stake in the company may not exceed 14.9%, according to a Twitter securities filing.