Update (0916ET): A few hours have passed since the news broke Tesla CEO Elon Musk purchased a 9.2% passive stake in social media company Twitter. Wall Street analysts are out with their notes (courtesy of Bloomberg), about Musk's latest move.
- "Musk may try to use this stake to push for changes in Twitter's content rules," and his recent talk about starting a new social platform suggests his aims "aren't necessarily financial"
- The stake is "hardly a major financial commitment" for Musk, as it is large on an absolute basis but a small part of his net worth
- The passive stake could be "just the start of broader conversations with the Twitter board/management that could ultimately lead to an active stake and a potential more aggressive ownership role"
- Analyst Daniel Ives isn't concerned about this represents Musk "taking his eye off the ball" with Tesla
- "Twitter's business positioning and, ultimately, its credit profile are likely to get a boost from Elon Musk's input, though near-term buyout concerns may briefly push bond spreads wider on LBO concerns"
Musk's latest adventure sent Twitter shares as high as 26% premarket -- now about 22%. Facebook, Snapchat, and Pinterest were slightly higher. Tesla shares were up about 1.4%. Meanwhile, Digital World Acquisition, the SPAC bringing former President Trump's media venture public, plunged 13% premarket.
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Twitter shares jumped more than 26% premarket after a 13G filing revealed Elon Musk has taken a passive stake in the social media company.
According to the 13G filing, Musk has accumulated 73,486,938 shares of Twitter, representing a 9.2% (based on 800,641,166 shares of Common Stock outstanding). The stake is worth nearly $2.9 billion, based on Friday's closing price.
The filing comes about ten days after Musk tweeted that the social media company is "failing to adhere to free speech principles fundamentally undermines democracy." He asks his audience of more than 80 million people: "What should be done?"
Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy.— Elon Musk (@elonmusk) March 26, 2022
What should be done? https://t.co/aPS9ycji37
He also asks his followers, on the same day, "Is a new platform needed?"
Is a new platform needed?— Elon Musk (@elonmusk) March 26, 2022
And it comes two days after founder Jack Dorsey partially blames himself for the state of the internet today, admitting that "centralizing discovery and identity into corporations really damaged the internet."
the days of usenet, irc, the web...even email (w PGP)...were amazing. centralizing discovery and identity into corporations really damaged the internet.— jack⚡️ (@jack) April 2, 2022
I realize I'm partially to blame, and regret it.
After giving some "serious thought" to creating a new social media platform, Musk has decided it was easier to buy an existing one to reform the too-woke platform.
Wedbush analyst Dan Ives told CNBC's "Squawk Box" this morning that the billionaire "could try to take a more aggressive stance here on Twitter," adding "this could eventually lead to some sort of buyout."
The current mood of woke Twitter employees...