Tesla CEO Elon Musk Takes Stake in Twitter – Analyst Says It Could Lead to a Buyout

Elon Musk, CEO of Spacex and Tesla, disclosed Monday that he had taken 9.2% in Twitter Inc. through a filing with U.S Securities and Exchange Commission.

The Elon Musk Revocable Trust, of which Tesla boss is the sole trustee holds 73,486,938 Twitter shares. According to the SEC filing, this represents 9.2% of Twitter’s common stock. This amount is based on 800 641,166 shares outstanding as at February 10. Based on Twitter’s closing prices on Friday, the stake is worth $2.89 trillion.

Musk made the investment in the social media company just over a week ago, after declaring that he was’seriously considering’ creating a new platform for free speech.

Musk is a regular Twitter user and also created a poll asking his 80 million followers if they believe Twitter adheres to the free expression principle. Musk, Tesla’s boss, hinted that the results of the poll would be ‘important’. More than two million votes were counted, and 70.4% of those who voted no said so.

Musk is now Twitter’s largest shareholder with the 9.2% stake. Comparatively, Twitter founder Jack Dorsey holds a 2.25 percent stake. He stepped down last year as CEO.

Although Musk’s investment in Twitter can be considered passive, investors believe that it could lead to more. Twitter shares surged over 25% in the premarket.

CNBC interviewed Dan Ives, a Wedbush analyst Monday:

Musk might try to be more assertive on Twitter. This could eventually lead to a buyout.

Ives said, “This makes sense given the things Musk has at most been talking about, at minimum from a social media standpoint,” In a note, the analyst said that he expected this passive stake to be the beginning of larger conversations with the Twitter board management and management. This could eventually lead to an active stake in Twitter and potentially a more aggressive ownership position.

Paul Hickey is the co-founder of Bespoke Investment Group. He shared his thoughts with CNBC, “Twitter’s a $30 billion company. Elon Musk is worth $300 Billion. He doesn’t necessarily have a large stake in it. It’s a Tesla shareholder’s perspective. Do you really want him to lose his focus on the ball as they grow?