Elon Musk just spent $2.98 billion buying a 9.2% share of microblogging platform Twitter.
Inevitably the Twitter share price reacted by rising 26% in pre-market trading. That's partially fueled by the share purchase coming as a big surprise following Musk's comments last week regarding free speech, online propaganda, and him "giving serious thought" to creating his own social platform to rival Twitter.
As CNBC reports, Musk now owns 73,486,938 shares of Twitter, as revealed by a Securities and Exchange Commission 13G filing released today. The $2.98 billion valuation is based on Twitter's share price on Friday, so he's already made a significant on-paper profit assuming that 26% price increase holds.
His stake in Twitter is classed as "passive," but it's being viewed as a potential first step in a bigger move by the billionaire for more control. Talking to CNBC Squawk Box, Wedbush analyst Dan Ives pointed out, "Musk could try to take a more aggressive stance here on Twitter" and that his stake could eventually lead to a buyout attempt.
A buyout would certainly tie up with his comments last week about launching his own network. Why launch a new one when you can acquire an existing platform with over 200 million active users?