Billionaire Elon Musk Becomes The Single Largest Shareholder Of Twitter

Twitter is where free speech happens.

In the place where real-time communication and information are shared, Elon Musk is one of the platform's most prominent and influential users.

Musk who is also the world's richest man with a net worth far exceeding $200 billion, is famous for using the social media to share almost anything he has in his mind.

And this time, Musk has bought a huge stake in Twitter.

He'll be of value as both a "passionate believer and intense critic" of the social network, according to Parag Agrawal, who became Twitter's CEO replacing Jack Dorsey.

Musk acquired 9.2% ownership of Twitter, and this makes him the largest single shareholder.

However, Twitter's board of directors limits the stake Musk can hold, limiting him from owning more than 14.9% of common stock during his tenure, and for 90 days afterward.

According to reports, Musk is allowed to serve a Class II director, with a term that expires at the company's 2024 annual shareholder meeting.

Co-founder Jack Dorsey and Twitter’s CEO Parag Agrawal proclaimed that they were happy to see Musk on board.

Dorsey who thought well of the deal, said that believed Musk "cares deeply" about the planet and Twitter.

He also believed that Musk and Agrawal can "lead with their hearts," he said.

But behind the scene, their move is also a way for them to all play safe.

The limit imposed and the seat at the company's board of directors given to Musk, are meant to prevent Musk from forcefully taking over the company.

Elon Musk is the first person in the modern world of tech to have reached a net worth shy of $300 billion.

With that amount of money, through cash or stock, Musk is able to buy almost any company in the world.

As of March 12, Twitter's total worth was reported at around $35 billion, meaning that buying Twitter whole won't make a dent in Musk's wallet.

By preventing Musk from taking over Twitter, the company can keep its executives, and keep Musk from interfering too far.

They fear this not only because Musk has the capacity to acquire the whole of Twitter for himself, but also because Musk has done such thing in the past.

Musk is publicly known as the co-founder of Tesla, when in fact, he was never involved at the forming of the company in the first place.

Tesla was originally founded by Martin Eberhard and Marc Tarpenning

The reason Musk got the public recognition instead of the two founders, is because Musk with his loaded cash after receiving $100 million from the sale of his interest in PayPal, invested $6.5 million in Tesla in 2004, to become its largest shareholder.

By having the largest stake, he was given the chairman role, and by leading the board, he had the capacity to ask Eberhard to step down as CEO. Eberhard then took the title of President of Technology at Tesla before ultimately leaving the company in January 2008.

Tarpenning, who served as the company's Vice President of Electrical Engineering, also left the company in January 2008.

In June 2009, Eberhard filed a lawsuit against Musk for allegedly forcing him out. The settlement happened in September 2009, which allows all Eberhard, Tarpenning, Wright, Musk, and Straubel to call themselves co-founders of Tesla.

As for the fate of the company at the time, it saw several people stepping up as its CEO, before ultimately, Musk stepped up to become its CEO.

What Twitter is essentially doing here, is preventing its current executives from becoming the next Martin Eberhard.

Members of the board, as well as Dorsey and Agrawal are taking the steps with careful consideration.

Following the news, Twitter shares have surged and have gone up by around 20%.

Agrawal noted that the company has been talking to Musk for several weeks, before Musk cashed in

It's worth noting that Musk’s disclosure of the Twitter stake suggested it was a passive stake, suggesting that he has no plan to takeover Twitter or anything.

That is at least initially, because Musk is already an avid Twitter user with huge followings.

Musk with his more than 80 million followers, can create enough momentum to change things, as what he has done several times in the past.

In this case, Musk has already shown how he can agitate a change, when he tweeted to ask his followers whether they wanted an edit feature.

Users responded with a resounding no to the free-speech question, and a yes to an edit feature.

Previously, the U.S. Securities and Exchange Commission (SEC) has already fined Musk for "misleading investors with tweets," and insisted that he have someone with legal experience oversee his tweeting.

Musk openly ignored this.

It's worth noting that Musk reportedly paid $2.89 billion to acquire his share at Twitter, an amount that only accounts to a mere 1% of his net worth.

Musk was initially offered a seat at Twitter's board, but it was later said that he declined the offer.

The news was delivered by Twitter's CEO:

Later, Musk had a slight change of plans, and said that he offered to take Twitter Inc. private in a deal valued at $43 billion, lambasting company management and saying he’s the person who can unlock the "extraordinary potential" of the communication platform.

The world’s richest person said he is willing to pay $54.20 per share in cash, a price that is 38% above the price on April 1, 2022, the last trading day before Musk went public with his stake.

Musk can do this, because all he has to do is receive votes from shareholders, not board members.

Jack Dorsey is the single largest shareholder (before Musk), with 2.2% ownership of Twitter. The rest of the board members only own point zero percent, which is collectively next to nothing.

If the majority of the people who own Twitter agree, Musk has the capacity to take Twitter private, and own it.

Musk has announced the proposed deal in a filing with the SEC.

Read: Elon Musk Is Taking The Entirety Of Twitter For Himself, By Acquiring It For $44 Billion