Twitter’s stock soared by more than 25 per cent in pre-market trade on Wall Street Monday, after Tesla boss Elon Musk took a major stake in the social media company.
According to a document filed with the US Securities and Exchange Commission, Musk acquired nearly 73.5 million Twitter shares — a 9.2 per cent stake in the company.
Based on Friday’s closing price of the company’s stock, the South African-born billionaire’s investment amounts to nearly $2.9 billion.
At 11:15 GMT, Twitter’s stock was trading at about $49, up by around 26 per cent.
Musk, who is the world’s richest man and CEO of electric car manufacturer Tesla, is a frequent user of Twitter, posting missives and announcements that often generate controversy.
In the summer of 2018, he published a tweet where he claimed that he had the appropriate funding to privatise Tesla, without providing proof of this.
The tweet caused a brief spike in Tesla’s share price but the SEC said the statements on Twitter were “false and misleading”.
The mogul then agreed that any tweets capable of moving Tesla’s share price would be screened by lawyers, as part of a deal that saw him pay $20 million to settle a fraud case brought by the SEC.
Then in early March, Musk asked a New York judge to overturn the agreement with the stock market watchdog on his tweets.
His lawyer said the dispute with the SEC was “yet another attempt to harass Tesla and silence Mr Musk.”