Elon Musk takes passive stake in Twitter; shares soar 28% in pre-market trading

Twitter shares rose about 28% in pre-market trading

Tesla Inc CEO Elon Musk holds a 9.2% stake in micro-blogging site Twitter Inc, according to a regulatory filing on Monday.

Twitter shares rose about 28% in pre-market trading after a 13G filing revealed Elon Musk has taken a 9.2% passive stake in the social media company.

Twitter shares were last up 28.49% in at $50.51 in pre-market trading following the news. Based on Friday’s market close, the stake is worth about $2.89 billion.

The world’s richest man bought nearly 73.5 million shares, a document filed with the US Securities and Exchange Commission shows.

Musk, a prolific user of Twitter himself, has been critical of the social media platform and its policies of late. He has said the company is undermining democracy by failing to adhere to free speech principles.

Recently, Musk had said in tweets that he is giving serious thought to creating a social media platform because Twitter is “failing to adhere to free speech principle.”

“Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy,” Musk tweeted..

He said in an earlier tweet on March 25 that “free speech is essential to a functioning democracy,” and he questioned if Twitter “rigorously adheres to this principle.”

The announcement will be yet another major test for new Twitter CEO Parag Agrawal, who replaced Jack Dorsey after he unexpectedly resigned in November. Agrawal vowed to increase accountability, make decisions faster and to improve product execution. The company set ambitious goals for growth including increasing annual revenue to $7.5 billion and getting to 315 million daily users by the end of 2023.

Musk posted a cryptic meme in December after Twitter announced that Agrawal was taking over from Dorsey as Twitter’s CEO. It depicted Agrawal as Soviet dictator Joseph Stalin and Dorsey as Soviet secret police head Nikolai Yezhov being shoved into water.

Twitter is under pressure to move faster in building new products. The company has set ambitious revenue and user growth goals to convince skeptical investors that it was serious about expanding its business. While Twitter has grown steadily for years, its stock gains have lagged behind industry peers.

Musk has lambasted Twitter’s recent development of profile pictures linked to non-fungible tokens, saying the social media company has the wrong priorities.

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