Tesla chief executive officer Elon Musk purchased a passive stake of 9.2% in Twitter, making him the largest outside shareholder in the social media stock.
The purchase comes not long ago after Musk criticized the company for failing to uphold the tenets of free speech.
Musk owns 73,486,938 shares of Twitter, which represents a 9.2% passive stake in the company, according to the Securities and Exchange Commission 13G filing released Monday. The stake is worth $2.89 billion, based Twitter’s closing price on Friday.
The Musk buy comes less than two weeks after Musk criticized the company, polling people on Twitter about whether Twitter adheres to free speech principles. “Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy,” Musk tweeted. “What should be done?”
While it is classified as a passive stake, investors were bidding shares higher on the chance this could lead to something more. Twitter shares surged more than 25% in the premarket.
“Musk could try to take a more aggressive stance here on Twitter,” Wedbush analyst Dan Ives said Monday on CNBC’s “Squawk Box.” “This eventually could lead to some sort of buyout.”
“This makes sense given what Musk has at least been talking about, at least from a social media perspective,” Ives said.
Musk is a frequent user of Twitter and has more than 80 million followers on the platform. However, some of his tweets have gotten the Tesla chief into hot water over the years.
On Aug. 7, 2018, Musk tweeted he had “funding secured” to take Tesla private at $420 per share. The 12 months following that tweet were a roller coaster for Musk and Tesla shareholders. In that time, the company set performance records, but also had to deal with litigation, government inquiries and layoffs. Musk also reached a settlement with the SEC that removed him from chairman role within Tesla.