Elon Musk, Tesla’s chief executive and one of the most followed users on Twitter, has purchased a 9.2% stake in the social media giant, according to a regulatory disclosure filed Monday.
Twitter shares exploded 26% in premarket trading after the Securities and Exchange Commission filing showed that Musk snapped up more than 73 million shares, valued at $2.89 billion.
The purchase comes weeks after Tesla questioned whether Twitter “rigorously adheres” to the principles of free speech in a poll to his more than 80 million followers.
Dan Ives, managing director at Wedbush Securities, said Musk’s passive stake could be just the beginning. Rather than starting a competing social media platform, as some predicted after the poll, “It looks like Elon has his eyes laser set on Twitter.”
He predicted Musk will eventually pursue an active stake, positioning him to take “more aggressive ownership role” in the company. “We view this move as Musk just further building out his tentacles,” Ives said Monday in comments emailed to The Washington Post.
Tesla did not immediately respond to a request for comment from The Post.
Free speech seems to be front of mind for Musk: He recently accused the Securities and Exchange Commission of trying to “chill his exercise of First Amendment rights” while asking a judge to throw out a 2018 settlement agreement governing his tweets, alleging he felt boxed in by multiple sources of pressure at the time and he entered into it to protect Tesla shareholders.
The tweet in question was when Musk said he had “Funding secured” to take Tesla private at $420 a share, a claim later determined to be untrue but that sent the stock price up at the time. Musk and Tesla were each fined $20 million. Musk additionally had to step down as Tesla board chairman and agreed to have his potentially market-moving communications vetted by an approved securities lawyer.
“Tesla was a less mature company and the SEC’s action stood to jeopardize the company’s financing,” Musk said in a recent legal filing. “Defending against the SEC’s action through protracted litigation was not in the interests of the company and its shareholders. As Tesla’s CEO and Chairman at the time, I perceived that the company and its shareholders would be placed at undue risk unless I settled the matter promptly.”
At the time, Musk said the $20 million weed joke was “worth it.” Back then, Musk only had 22 million followers.
The Tesla chief is very active on Twitter, where he averages 125,181 likes per tweet, according to Socialtracker. He has tweeted more than 17,300 times.