THE ELON MUSK EFFECT
Published By: Giuseppe Spinazzè Guglielmo Liut
THE ELON MUSK EFFECT
Elon Musk is back at the centre of media attention, this time Tesla and SpaceX CEO has decided to acquire 9.2% of Twitter for $3 billion. Musk has become the richest man in the world, with a personal fortune of $267 billion.
He is a regular user of Twitter with more than 67million followers on the platform, through which he communicates his investments and opinions like the one last February, when he decided to invest 1.5 billion dollars in bitcoin.
In the past few days, the billionaire CEO of Tesla has criticised the policies of the same social network through a survey launched on his Twitter profile. Musk, who disagreed with the platform's approach to freedom of expression, had even declared that he was considering the creation of a new social network.
At the moment Musk is the majority shareholder in the company but it seems that he does not want to get into the board of directors.
The company's CEO, Parag Agrawal, announced: "Elon has decided not to join the board". The CEO then tweeted that "Elon's appointment to the board was to become officially effective on 9 April, but on that day Elon announced that he would not be joining the board". In his tweet, Agrawal attached a communication originally sent to Twitter employees, adding that "I believe this is the best choice".
This is even though Twitter's board "believed that having Elon as a trustee of the company, where he, like all board members, must act in the best interest of the company and all of our shareholders, was the best path to follow."
Musk has bought 73,486,938 shares of Twitter, in a transaction worth $2.89 billion to be more precise.
The stock which is listed on the stock exchange, at the opening of the markets has seen a significant growth of 26%, in fact one stock has almost reached the price of € 50.
Another major shareholder of twitter is Elliott management corporation, an activist investment fund, which holds 4% of the company's shares. In a note they declared themselves very happy that Musk had acquired part of the company. Now the business plan is to recapitalise the company and increase its value on the stock exchange. And for this Musk is the right person.
The only problem for Musk is that the twitter investors who sold him the shares have now launched a class action against Musk. This is because, according to them, they would not have benefited from the price increase that the market would have had if Musk had announced his decision at the beginning of the operation to buy 9% of the company.
Apart from this case, the last two years seem to have been a golden age for Musk. Everything he touches turns to gold, from electric cars to nano-technologies, from sustainable mobility to solar panels, it seems that Musk is a sort of Midas king. Will he be able to keep his touch with this new twitter venture?