Musk Buys 9.2% Twitter Stake

April 5, 2022

Tesla CEO Elon Musk bought shares in Twitter which now renders him the largest outside shareholder. Musk took 73,486,938 shares of Twitter, which represents a 9.2% passive stake in the company. The deal is worth $2.89 billion.

Musk has said, “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?”

"We would expect this passive stake as just the start of broader conversations with the Twitter board/management that could ultimately lead to an active stake and a potential more aggressive ownership role of Twitter," Dan Ives of Wedbush Securities said in a client note early Monday.

Twitter's stock was up 25% before the opening bell Monday.

The Board will appoint Mr. Musk to serve as a Class II director with a term expiring at the Company’s 2024 Annual Meeting of Stockholders, subject to and contingent upon the provision by Mr. Musk of any information that the Company reasonably requires to complete its customary onboarding procedures (including a customary background check) for members of the Board.

Other than as described in Item 1.01, there are no arrangements or understandings between Mr. Musk, on the one hand, and the Company or any other persons, on the other hand, pursuant to which Mr. Musk was selected as a director. There are no related party transactions between the Company and Mr. Musk (or any of his immediate family members) requiring disclosure under Item 404(a) of Regulation S-K. Mr. Musk does not have any family relationships with any of the Company’s directors or executive officers.

Mr. Musk will participate in the director benefits arrangements applicable to non-employee directors as described in the Company’s definitive proxy statement filed with the Securities and Exchange Commission on April 13, 2021. In addition, the Company will enter into its standard form of indemnification agreement with Mr. Musk.