Musk Takes Nearly $3B Stake in Twitter; DOGE Spikes
The Tesla CEO often uses the social media site to disseminate his views on crypto.
Elon Musk has taken a 9.2% stake in social media company Twitter (TWTR), according to a regulatory filling on Monday. Musk purchased 73,486,938 of common stock in the social media company, according to the filing. Based on Twitter's last closing price of $39.31, the stake would be worth $2.89 billion.
Musk, the CEO of electric-car maker Tesla (TSLA), is a staunch backer of cryptocurrencies and often uses Twitter to publicly announce his views on crypto.
Foreshadowing or planned action?
In a March 25 Twitter poll, Musk had asked users whether they believe the platform adheres to the free speech principle because he believes it is essential to the functioning of a democracy. He also said the results of this poll would be vital.
Over 70% of respondents voted "no," implying they do not think the platform adheres to the free speech principle. Musk later asked users if a new social media platform is needed.
In an analyst note released on Monday after the news, Daniel Ives of Wedbush Securities wrote that it "looks like Elon has his eyes laser set on Twitter and 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."
Meme coins spike along with shares
Prices of meme coin dogecoin (DOGE) jumped almost 10% several minutes after the news of Musk's stake. SHIB rose 5%, following DOGE's lead.
Data shows DOGE jumped from $0.143 to over $0.156 several minutes after the reports of Musk’s stake at 10:30 UTC (6:30 a.m. ET). At the time of writing, the price fell slightly to $0.154.
Shares of Twitter jumped almost 20% to $47.20, while shares of Tesla were up almost 1% in pre-market trading.
Bloomberg had earlier reported on the stake.
The Elon Effect
Musk is no stranger to sending both traditional and crypto markets into a tizzy with his tweets. Previous comments have sent prices of several meme coins and bitcoin (BTC) skywards.
His electric car company, Tesla, held roughly $2 billion worth of bitcoin at the end of 2021. Tesla started accepting bitcoin for its cars in 2021, but later ended the project, citing climate concerns.
Tesla also accepts DOGE payments on its online merchandise store. The news had previously sent prices of DOGE flying 11% in January. Musk also lent support to dogecoin development and adoption. A May 2021 tweet saw Musk state he was working with dogecoin developers to improve system efficiency. That sent dogecoin prices flying by 22%.
Then in March, prices of DOGE jumped 10% after Musk said in a tweet that he is not selling his crypto holdings, which includes DOGE.
UPDATE (April 4, 11:07 UTC): Adds background on Musk and his impact on cryptocurrencies in second and third bullet.
UPDATE (April 4, 11:15 UTC): Adds the value of the stake in the headline and the first bullet, updates sourcing.
UPDATE (April 4, 11:46 UTC): Adds background on Musk's Twitter poll in second and third bullet.
UPDATE (April 4, 12:34 UTC): Updates headline. Adds additional background and crypto market reaction, adjusts story structure.
UPDATE (April 4, 15:44 UTC): Adds analyst comment.
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