Elon Musk Bought 9.2% of Twiter

Marauder06

Marauder06

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So Elon Musk bought a lot of Twitter stock, which not only caused the stock price to rise, it gave him a 9.2% stake.
Elon Musk becomes Twitter's biggest shareholder with 9.2% stake

From the related articles I'm reading, this appears to be a bigger deal than I thought it was. 9.2% is a significant share, but isn't there like 90% more stock still out there? Why is this such a big deal--does less than 10% total stock / votes give you that much leverage over a company? Asking because I don't understand how this works.
 
The >90% of stock left is divided among more shareholders, so think of it as proportional representation than 1:1 democracy. Almost 10% is a HUGE stake in most companies.
 
Marauder06 said:
So Elon Musk bought a lot of Twitter stock, which not only caused the stock price to rise, it gave him a 9.2% stake.
Elon Musk becomes Twitter's biggest shareholder with 9.2% stake

From the related articles I'm reading, this appears to be a bigger deal than I thought it was. 9.2% is a significant share, but isn't there like 90% more stock still out there? Why is this such a big deal--does less than 10% total stock / votes give you that much leverage over a company? Asking because I don't understand how this works.
Click to expand...
For a company like Twitter, 9.2% is a big deal. With the number of material shareholders that they have, votes on controversial issues are often fairly close. 9.2% is enough to make a strategy that is a foregone conclusion swing the other way. Think about it in election terms... someone that was losing by almost a 20% margin at 41-59 and then *poof* 9.2% goes to the 41 side, now they've won the election. That level of control means that there will be opportunities for manipulation of the company for his personal benefit rather than for the long term benefit of the company and other shareholders.

Normally when a block of common stock that large is sold, the buyer signs an agreement stating that they are not going to participate in decision making for the company and declaring that it is solely a financial investment. The big deal in this is that Musk didn't sign that paperwork. That is going to trigger the SEC to watch Twitter very closely for violations. While it's not a violation of the law for Musk to decline to sign the agreement, other things that Twitter does that might be in the grey areas will be watched very closely.
 
compforce said:
For a company like Twitter, 9.2% is a big deal. With the number of material shareholders that they have, votes on controversial issues are often fairly close. 9.2% is enough to make a strategy that is a foregone conclusion swing the other way. Think about it in election terms... someone that was losing by almost a 20% margin at 41-59 and then *poof* 9.2% goes to the 41 side, now they've won the election. That level of control means that there will be opportunities for manipulation of the company for his personal benefit rather than for the long term benefit of the company and other shareholders.

Normally when a block of common stock that large is sold, the buyer signs an agreement stating that they are not going to participate in decision making for the company and declaring that it is solely a financial investment. The big deal in this is that Musk didn't sign that paperwork. That is going to trigger the SEC to watch Twitter very closely for violations. While it's not a violation of the law for Musk to decline to sign the agreement, other things that Twitter does that might be in the grey areas will be watched very closely.
Click to expand...
I'm not super well versed in all the peculiarities of investment filings, but I was under the impression that Musk filing as a 13G investor meant he was agreeing to not participate in decision making, IE its a passive investment.
 
On the surface this looks great. He's going to rein in all of those problems with free speech, deplatforming, cancel culture, burned popcorn...whateverthefuck.

I'll reserve any opinions until this shakes out or the next big Twitstorm or whatever shows us his intent.
 
If, after Elon, Megan and Harry can still get Twitter users banned for criticizing them—like they’ve been able to do very successfully with Facebook and YouTube—then I’ll know it’s a passive investment.
 
Cookie_ said:
I'm not super well versed in all the peculiarities of investment filings, but I was under the impression that Musk filing as a 13G investor meant he was agreeing to not participate in decision making, IE its a passive investment.
Click to expand...
That's the filing he didn't sign. He may have signed it since, but initially he didn't.
 
compforce said:
For a company like Twitter, 9.2% is a big deal. With the number of material shareholders that they have, votes on controversial issues are often fairly close. 9.2% is enough to make a strategy that is a foregone conclusion swing the other way. Think about it in election terms... someone that was losing by almost a 20% margin at 41-59 and then *poof* 9.2% goes to the 41 side, now they've won the election. That level of control means that there will be opportunities for manipulation of the company for his personal benefit rather than for the long term benefit of the company and other shareholders.

Normally when a block of common stock that large is sold, the buyer signs an agreement stating that they are not going to participate in decision making for the company and declaring that it is solely a financial investment. The big deal in this is that Musk didn't sign that paperwork. That is going to trigger the SEC to watch Twitter very closely for violations. While it's not a violation of the law for Musk to decline to sign the agreement, other things that Twitter does that might be in the grey areas will be watched very closely.
Click to expand...
That makes sense to me, but it would also seem to me that the majority of Twitter shareholders who do vote will be liberals/progressives, and this may energize fence-sitters on the left who would otherwise not vote, but will now to "save Twitter" or whatever.

And what's to stop any number of wealthy billionaires who lean left from buying like 15% of Twitter in a "what's up now?" moment? Although if I were Musk, I'd probably encourage that, get the shares to jump another 25% (on top of the 25% they jumped after he bought in), cash out at +50%, and then use that windfall to fund my own rival social media company, like he previously threatened to do.
 
Musk is a lot of things, but he isn’t a dummy. 1) this wasn’t an impulse buy. You don’t just cut a check and own 9% of Twitter.
2) dude has a plan. You don’t drop that kind of coin without an end game in mind.
 
Vanguard and Blackrock own 8.8% and 6.5%, respectively, of Twitter shares.

Vanguard and Blackrock own 5.72% and 3.35% respectively, of Tesla shares.

No matter how rich you are, you have someone that is going to be able to leverage your behavior. That "someone" that can leverage Elon Musk is the Vanguard and Blackrock conglomerate.

It's fun to think that Musk is going to be able to take Twitter from what it is to what it might be... I am more excited about a completely parallel system; not making this one better.

To quote a highly overrated television show, "You can't fix a broken wagon wheel. But you can use the pieces to make a new one."
 

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