Key points:
- Musk purchases $2.89B stake in Twitter in eye-opening SEC filing
- Relationship could definitely progress further, argues Wedbush
- A much more ‘aggresive' role could follow the initial stake
- The move doesn't mean that Tesla and SpaceX will lack leadership
Investors awoke to something quite different this morning. An eye-opening filing from the SEC showed that Elon Musk, the passionate and globally-renowned CEO and Founder of Tesla has purchased a nearly $3B stake in social hub Twitter (NYSE: TWTR) . The stake officially means Musk is one of the largest shareholders of the company, meaning the socially-active figurehead will likely have a lot to say about the future of the company. The move came only a couple of weeks after Musk tweeted contentiously regarding Twitter’s limits to ‘free speech’, following with “is a new platform needed?”.
The Tesla CEO has always been at the forefront of social media, amassing a huge following and sparking debates as to the legitimacy of his Twitter use for stirring up markets; his tweets have been known to cause huge rallies in TSLA stock and various cryptocurrencies; in particular the meme-friendly Dogecoin. His $2.89B stake equals a nearly 10% stake in the company, which is four times the 2.25% holding of Twitter founder Jack Dorsey. So what’s next?
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Wedbush analyst Daniel Ives noted this morning that the large stake is likely the beginning of a much larger transition within the company and that broader conversation with Twitter’s management could breed heavier involvement from Musk, including an active stake and a more ‘aggressive’ role of Twitter. The purchase might have sparked worry amongst avid Tesla investors, but Ives remains convinced that the purchase is just Musk spreading his visionary wings as it were, and that Tesla and SpaceX should remain on their current track.
This could be a crossroads for Twitter. Musk likely has a vision for his favorite social media platform, and it will be interesting to see whether his recent tweets regarding a ‘new platform’ will come to fruition. If Wedbush is correct in assuming this is just the beginning, the future of Twitter could be in the hands of Elon Musk.
