Tesla CEO Elon Musk has bought a $3 billion stake in Twitter, making him the social media giant's largest shareholder. The news sent Twitter shares soaring by as much as 26% in pre-market trading. Just last week, Musk said he was giving serious thought to building his own social media platform.
Elon Musk purchased a 9% interest in Twitter, making him the social media platform's largest shareholder at a time when he is questioning the platform's commitment to free expression and the First Amendment.
Musk has also hinted at the prospect of launching a rival social media network, thanks to his large and devoted Twitter following.
Musk, according to industry observers and legal experts, may start campaigning for changes at Twitter right once if he so chooses.
Because the value of Twitter's shares has been declining since early last year, CFRA Analyst Angelo Zino stated in a note to investors that the company could be seen as an acquisition target.
In November, Jack Dorsey resigned as CEO. Musk's stake in Twitter has grown to more than four times that of Dorsey, who co-founded the firm and was previously the largest individual stakeholder.
"Musk's actual stake is a very small percentage of his fortune, and an all-out buyout should not be ruled out," Zino, a Twitter and social media journalist, stated.
According to Erik Gordon, a law and business professor at the University of Michigan, Musk could regard Twitter as an investment with significant growth potential, or he could be buying for non-financial reasons, such as ensuring that the network does not restrict his speech.
"What he could be concerned about is if a large number of his tweets appear to be disinformation, and Twitter responds by saying, 'We're doing our job against disinformation,'" Gordon said.
Musk has not stated how he plans to amend Twitter's rules, but the social media platform's history of suspensions and bans is widely known.
Following the Jan. 6 Capitol riot, which critics accused him of encouraging, former President Donald Trump was banned from Twitter and other major social media platforms. The restriction has highlighted uncomfortable questions about free speech in a social media market driven by a few big titans — an issue that Trump and conservative media have pounced upon.
Musk received a lot of praise from those circles on Monday.
Michael Flynn, a former general who served as Donald Trump's national security adviser for a short time before being barred from Twitter in January 2021, asked Musk to make improvements at Twitter over Telegram.
“Hey Elon, how about letting all of those dropped from Twitter for being America First and Pro-Trump back on Twitter!!!", wrote Flynn.
The personal account of far-right U.S. politician Richard Spencer was suspended from Twitter earlier this year. Rep. Marjorie Taylor Greene has been charged with many infractions of the COVID-19 platform's disinformation policy.
Other people banned in recent years include right-wing conspiracy theorist Alex Jones and his Infowars show for abusive behavior, Steve Bannon for suggesting the beheading of Dr. Anthony Fauci, former Ku Klux Klan leader David Duke for breaking the social media site's hate speech rules, and right-wing conspiracy theorist Steve Bannon for suggesting the beheading of Dr. Anthony Fauci.
Musk recently described himself as a "free speech absolutist" on Twitter, explaining why his Starlink satellite internet service, which is part of his aerospace company SpaceX, would not block Russian state media outlets that have spread propaganda and misinformation in support of the Kremlin's narrative on its war in Ukraine.
However, advertisers, who are Twitter's primary source of revenue, would not appreciate such rigidity, according to Brian Wieser, GroupM's worldwide president of business intelligence. Because a toxic platform can drive many other users away, brands that advertise on Twitter greatly want some content rules.
"Some kind of speech, such as encouraging an insurgency or advocating harming people, are not the kinds of things most marketers want to support," said Wieser, a media analyst for advertisers.
The shares of Twitter increased by about 30% on Monday. Twitter's shares have risen about 50% since March 14, the date indicated on the company's filing, indicating that Musk's investment has paid off handsomely thus far.