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Elon Musk acquires 9% stake in Twitter; shares skyrocket

Though Tesla CEO’s investment is passive, he has been vocal about free speech on the platform, even pondering starting up a rival network

Tesla and SpaceX CEO Elon Musk speaks at the SATELLITE Conference and Exhibition in Washington, March 9, 2020. (AP Photo/Susan Walsh)
Tesla and SpaceX CEO Elon Musk speaks at the SATELLITE Conference and Exhibition in Washington, March 9, 2020. (AP Photo/Susan Walsh)

AP — Tesla CEO Elon Musk has taken a 9.2% stake in Twitter, purchasing approximately 73.5 million shares, according to a regulatory filing Monday.

Musk’s stake in Twitter is considered a passive investment, which means Musk is a long-term investor who’s looking to minimize his buying and selling of the shares.

Yet in recent weeks, Musk has raised questions about free speech on Twitter and asked whether failing to adhere to its basic principles undermines democracy.

He has also pondered starting up a rival social media network, and industry analysts were skeptical about whether the mercurial CEO would remain on the sidelines for long.

“We would expect this passive stake as just the start of broader conversations with the Twitter board/management that could ultimately lead to an active stake and a potential more aggressive ownership role of Twitter,” Dan Ives of Wedbush Securities said in a client note early Monday.

Twitter’s stock surged 25% before the opening bell Monday.

Musk said that he was “giving serious thought” to creating a rival social media platform and has clashed repeatedly with financial regulators about his use of Twitter.

Early last month, Musk asked a federal judge to nullify a subpoena from securities regulators and throw out a 2018 court agreement in which Musk had to have someone pre-approve his posts on Twitter. US securities regulators said they had legal authority to subpoena Tesla and Musk about his tweets, and that Musk’s move to throw out a 2018 court agreement that his tweets be pre-approved is not valid.

Musk’s revelation about his stake in Twitter shares comes two days after Tesla Inc. posted lackluster first-quarter production numbers. While the company delivered 310,000 vehicles in the period, the figure was slightly below expectations.

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