Musk now Twitter's largest stockholder! OMG...we may get free speech on social media?

Elon Musk Takes Surprise 9% Stake in Twitter, Sending Shares Higher

Tesla CEO in recent weeks has said he was considering starting a rival social-media company of his own

Elon Musk, who last month attended the opening of a Tesla factory in Germany, has questioned Twitter’s commitment to free speech.

By Will Feuer and Sarah E. Needleman, WSJ

Updated Apr. 4, 2022 10:30 am ET

Elon Musk disclosed a 9% stake in Twitter Inc., turning one of the social-media company’s most famous users into its largest shareholder.

The surprise move sent Twitter’s stock up 23% in early Monday trading.

In a securities filing Monday, the Tesla Inc. chief executive reported owning almost 73.5 million shares of Twitter as of March 14, representing a stake worth $2.9 billion based on Friday’s closing price. That gives Mr. Musk more Twitter shares than even company co-founder and former CEO Jack Dorsey.

Mr. Musk’s arrival as an investor adds a jolt to what has been a somewhat stagnant social-media platform. The outspoken entrepreneur hasn’t been shy about questioning Twitter’s values. In recent weeks, he has mused to his more than 80 million followers on the service about its commitment to free speech and has said he was considering starting a rival of his own.

On March 25, Mr. Musk tweeted a poll, saying, “Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?”

“The consequences of this poll will be important. Please vote carefully,” Mr. Musk added in a follow-up tweet.

More than 70% of the roughly two million people who responded voted no.

“There’s no such thing as a passive stake with Elon Musk,” Cascend Securities analyst Eric Ross said. “He’s clearly going to roll his sleeves up.”

Representatives for Twitter didn’t immediately return a request for comment.

Mr. Musk is the world’s richest person with a net worth of $273 billion as of Monday, according to the Bloomberg Billionaires Index, a ranking of the richest people in the world that is updated daily.

In recent years, Twitter and Meta Platforms Inc.’s Facebook and Instagram have faced criticism over how they handle content on their platforms. Some have accused the companies of censoring speech, while others say they don’t do enough to moderate content on their platforms that can lead to harm. Disinformation experts say people seeking to influence political campaigns or achieve illicit goals are finding new and more sophisticated ways to circumvent efforts by the platform operators to stop such behavior.

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Mr. Musk has taken aim at the software the platform providers use to surface content to their users. These algorithms are commonly optimized to drive user engagement—the more time people spend scrolling through their feeds, the more ads they can be served and the more money the platforms can make. How the software functions precisely, though, is something social-media companies generally closely safeguard.

Some critics say those algorithms can affect how people form opinions and make decisions in the real world, good or bad. The companies say their software is designed so users enjoy their experiences.

Mr. Musk polled his Twitter followers on March 24, asking them whether “Twitter algorithm should be open source.”

Mr. Dorsey, who stepped down as CEO last year, then retweeted Mr. Musk’s poll, saying, “The choice of which algorithm to use (or not) should be open to everyone.”

There have been other attempts to compete with today’s mainstream social platforms, some more successful than others. Ones such as Gab and 4chan are known for their loose content controls and have developed modest followings over the past several years. More recently, Parler launched in 2018, billing itself as an unbiased, free-speech alternative to larger social platforms, and this year former President Donald Trump’s Truth Social emerged as another.

Shares of Digital World Acquisition Corp., the special-purpose acquisition company that is set to merge with Mr. Trump’s Truth Social, tumbled more than 14% in premarket trading to $54.30 a share.

Mr. Musk has long been active on Twitter, sharing information about his businesses, including electric-vehicle maker Tesla, rocket company Space Exploration Technologies Corp. and transportation company The Boring Co.

In a now-infamous 2018 tweet, Mr. Musk said he was considering taking Tesla private and had secured funding at $420 a share.

That sent the stock surging and prompted an investigation by the Securities and Exchange Commission, which found that Mr. Musk had never discussed the specifics of such a going-private deal.

Mr. Musk and Tesla settled the SEC lawsuit in 2018 by each agreeing to pay $20 million, and Mr. Musk stepped down as chairman. He also agreed to clear tweets that were deemed material to Tesla shareholders beforehand with Tesla’s lawyers.

Last month he asked a federal judge to scrap a settlement with regulators about the 2018 incident.

He has also used Twitter to publicly attack the SEC.