Why does Elon Musk invite himself to Twitter?

twitter musk

The CEO of You’re here (“Narrow Moat”), Elon Musk, declared on April 4 that he had acquired a 9.2% stake in Twitter (“No Moats”).

The social network has just announced the appointment of the leader to its board of directors.

Although we’re not sure of Musk’s intentions – will he increase his stake? Will he become an activist shareholder? – we believe its communication to the company, other shareholders and the platform’s 217 million active users could affect Twitter’s long-term strategy.

Musk could seek to influence the openness of the platform and how it controls content or push to invest in the subscription model more aggressively as he did with Twitter Blue.

In different tweets (mainly one in December 2021 after the announcement of Parag Agrawal replacing Jack Dorsey as CEO, and a few last week), Musk hinted that he thinks the platform limits free speech and that a new platform needs to be created (more than 70% of Twitter’s more than 2 million users responded to a survey he published).

Musk has already indicated that he disagrees with Agrawal’s appointment and wants some changes.

This creates a little more uncertainty as to how Agrawal and the company might respond to the company’s now largest shareholder, which supports our very high uncertainty rating.

At the same time, this news will continue to attract attention, and eventually increase the number of users and their engagement on the platform, attracting more advertising dollars.

In response to Musk’s SEC filing, Twitter’s stock price jumped more than 20% but remains below our fair value estimate of $58 per share.

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