Elon Musk has purchased a 9.2% stake in Twitter Inc., making him the platform’s largest stakeholder, just a week after warning that he would shake up the social media business.
NewsReport gathered that after Musk’s purchase was revealed in a regulatory filing on Monday, Twitter shares jumped roughly 26% in premarket trade. Based on Friday’s market closing, the share is worth around $2.89 billion.
Musk, 50, polled his more than 80 million Twitter followers last month, asking if the company adhered to free speech ideals. He inquired if a new platform was needed after more than 70% responded no, and stated he was seriously considering launching his own.
Musk has been one of the biggest personalities on Twitter and has regularly run into trouble on the platform.
The Tesla Inc. chief executive officer is currently seeking to exit a 2018 deal with the U.S. Securities and Exchange Commission that put controls in place related to his tweeting about the electric-car maker.
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 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 the water.
“It looks like Elon has his eyes laser set on Twitter,” said Wedbush analyst Dan Ives in a research note, adding that the stake could lead to a “more aggressive ownership role.”
It’s unclear what Musk is planning with his stake. The filing with the SEC shows that the date of the event that triggered the disclosure was March 14. The type of form used often indicates the investor isn’t seeking to acquire control of a company or to influence who controls it.
Musk, already the world’s richest person according to the Bloomberg Billionaires Index, has made about $1.1 billion since mid-March, based on the pop in Twitter’s shares in early trading Monday.
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.