Tesla CEO Elon Musk is putting his money where his tweets are. On Monday, it was revealed that the sometimes unpredictable Musk had purchased a 9.2 percent stake in Twitter. The holding is classified as a passive one, with a value of close to $3 billion as of Twitter’s closing price on Friday.
Twitter’s stock soared by 25% in pre-market trading.
The news comes just two weeks after Musk, a long-time Twitter user, questioned the platform’s speech policies. He mentioned the possibility of starting his own social media network to compete with his friend Jack Dorsey’s.
“Failure to adhere to free speech rules significantly threatens democracy, given that Twitter functions as the de facto public town square. What is the best course of action? “In a tweet, Musk stated.
Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy.
What should be done? https://t.co/aPS9ycji37
— Elon Musk (@elonmusk) March 26, 2022
According to Tesla bull and Elon watcher Dan Ives of Wedbush, Musk’s Twitter position is “passive” but “may turn on a dime.”
“We would anticipate this passive stake to be the start of broader discussions with the Twitter board/management that might eventually lead to an active stake and a more aggressive ownership role for Twitter,” Ives added.
Tesla is still rated Out-perform, with a $1,400 price target, according to the analyst.
“For Tesla purposes, we view this move as Musk simply expanding his tentacles, and we are not concerned in the least about Musk “taking his eye off the ball” with Tesla/SpaceX,” Ives added.