You might enjoy online shopping in your free time, but Elon Musk sticks to the stock shopping. During his latest shopping spree, he bought the shares of a tech giant.
In case you missed it, Elon Musk now owns a larger stake in Twitter than co-founder Jack Dorsey. Musk has bought a 9.2% stake in the social-media firm, making him the single largest shareholder and has earned a seat at the board. His stake is quadruple that of Dorsey’s.
A few days ago, he asked his 80 million followers on twitter, if twitter does a good job of adhering to the principal of freedom of speech. A whopping 70% of the users said no, but the rest agreed. Later, an SEC filing revealed that the CEO of Tesla and SpaceX had owned a big chunk of Twitter at the time of the poll.
The whole situation escalated pretty fast. One day he was just one of Twitter’s most famous users. The next day he owned the largest stake in the social media company. And before one could process all that, Parag (Twitter’s CEO) announced that Elon Musk was appointed to the Twitter board! When the public learnt about Elon Musk’s investment in Twitter, everyone rushed to buy its shares and the Twitter share jumped nearly 30%! That’s some influence… He bought shares worth approximately $2.89 billion and by the end of Monday his investment was worth some $3.7 billion! The first comment he made after everyone found out was “oh hi lol.”
In a Tweet on Tuesday, Twitter chief executive Parag Agrawal said, “through conversations with Elon in the recent weeks, it has become clear to us that he would bring great value to our board.” He added, “as a passionate believer and intense critic” of the service, he is “exactly what we need.” To this, Musk replied saying that he was looking forward to working with Parag and the board to make significant improvements to Twitter.
With such a large stake in the company, what is it that he wants to achieve?
Elon Musk loves using Twitter, no secret there. He tweeted more than 3000 times last year and has over 17k tweets in total. Wild. It’s not uncommon for him to tweet more than 30 times a day. Either he promotes Tesla, SpaceX, the Boring Company or he talks about his recent investments in the crypto market, responds to other people on the platform, conducts polls (like the one about free speech and whether or not twitter should have an edit button), posts memes of ducks in police cars, Lord of the Rings quotes, April fools’ pranks about Tesla declaring bankruptcy and other bizarre stuff.
He uses the platform extensively and his tweets are impactful. Some of his tweets have moved a needle on Tesla’s stock prices, prices of cryptocurrencies (ahem dogecoin ahem) among other things. He has gotten in trouble with authorities (S.E.C. in particular) for some of his tweets (think: the infamous 420 tweet, tweets about Tesla’s finances etc.). But regardless of how you feel about him, he’s a pretty big deal.
Elon’s stake is less than a tenth, so technically he’s not an “active” investor, his investment is a “passive” stake. That means he’s not trying to gain control of the company (as of now). According to an SEC filing, he will serve as a Class II director, and his term at the company will expire in 2024. During his tenure, Musk won’t be able to own more than 14.9% of common stock. (source: SEC filing)
As a board member, he will have influence on the decisions of the company and it seems he intends to use it. He tweeted saying that he can’t wait to make significant improvements. He’s already asking for the opinion of the users on various changes and brainstorming ideas. “Do you want an edit button?” was one of his latest polls. He replied to a popular YouTuber and SpaceX fan who suggested making the edit feature available for only a few minutes and make the edits visible. He replied, “That sounds reasonable.”
What happens now? Will Musk give himself another title like Technoking?
Promotion Tool
Elon has used the platform extensively to his advantage and historically used the platform to promote his companies, acquisitions and thoughts. He is almost always trending. Just one Tweet from the Technoking can get tremendous news coverage.
At this point, Tesla’s main advertising platform is Musk’s Twitter account. Literally. In 2019, Hyundai spent $2000 on advertising per vehicle sold. Whereas, Tesla spent just 14 cents! (source: Newsthink)
Musk has millions of followers more than other car brands. To name a few, Hyundai has 409,000, Honda has 1.1 million and Volvo has 230,600. Musk, on the other hand, currently has 80.9 million followers. The competition isn’t even close. He’s the 8th most followed person on Twitter and one of the two businesspersons in the top 50.
Dogecoin’s price has been impacted by his tweets one too many times. In 2020, he posted a tweet showing a cloud of dust with a Shiba Inu face (which represents Dogecoin), taking over a city (representing the global financial system). Just this Tweet made the currency soar 20% in value!
He has also used the platform to leverage himself by posting predictions about the future, some of which are literally out of the world.
By becoming a member of the board and the largest shareholder, Musk isn’t just saving millions of dollars in advertising, he’s safeguarding a fundamental part of his business interests.
Edit Button
After everyone found out that Elon had a whopping 9% stake in Twitter, he asked his followers if they wanted an edit button.
Of course his tweet was witty. He misspelt ‘yes’ and ‘no’ as ‘yse’ and ‘on,’ to prove that it might be good to have an edit button. Parag replied to this tweet by saying that the question was important and the poll matters. He replied with the exact words Musk wrote when he posted the “free speech” poll.
In the past, Jack Dorsey has been against the edit button. He argued that the social media platform started as a text messaging service, and text messages can’t be edited after being sent. Plus, introducing an edit button on twitter raises a lot of other questions. Would retweets also change if the OG one is edited? Would users be able to edit tweets indefinitely? The edit button has its own pros and cons which I won’t get into over here cause that could be a whole other article.
Twitter communications team later clarified that it had been working on the button since 2021 and “no, we didn’t get the idea from a poll 😉 “. They are also going to test the button in Twitter Blue Labs in the coming months to see what works, what doesn’t and what’s possible. Elon stole their thunder!
Free Speech??
After the Jan 6 insurrection, last year, Trump was infamously kicked off Twitter. He used to tweet almost as much as Musk :p With all his advocacy for free speech, he gave the republicans some home for a Trump Twitter comeback.
Republican lawmakers and social media users called out to Elon to restore the former president’s Twitter privilege when he was appointed on the board. Congresswoman Marjorie Taylor Greene also requested him to restore free speech to it.
However, their hope was short lasting. A spokesperson for Twitter said that their policy decisions aren’t determined by the board or the shareholders and that they have no plans to reverse it.
Elon seems extremely enthusiastic about his first board meeting! He shared his excitement in the most appropriate manner, via a tweet. It was a meme featuring the infamous still of Musk smoking pot on the comedian Joe Rogan’s podcast back in 2018.
When you’re the richest man in the world, you could buy yourself a board seat just for fun. But with Musk’s history of posting, you never know if and how he’s going to exercise his power.
In 2020, then-Twitter CEO Jack Dorsey, who stepped down from his post in November, invited Elon Musk for a chat in front of the company’s employees. Dorsey asked the entrepreneur for constructive criticism on the social media platform, and added, “By the way, do you want to run Twitter?” He was joking then, but today Musk’s stake in the company is four times that of co-founder Dorsey. And a seat at the board is all he needs to push Twitter in the direction he feels is right. If you can’t beat them, join them!
UPDATE:
It appears as if Elon Musk has been spending a lot of time thinking about Twitter lately. In a series of Tweets, he shares how he plans to shake things up at Twitter.
He suggested that everyone who signs up for Twitter Blue (ie. pays $3/month), should get an authentication checkmark. The blue tick would be different from the “public figure” or “official account” mark. He also made some notable observations:
The Echo-nomist 
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