Musk Takes a Stake in Twitter

The stock market got a surprise today when Elon Musk announced he had taken a 9.2% stake in Twitter (TWTR). As I write this, shares of TWTR are up 24% in today’s trading.

That’s a nice gig to be a well-known billionaire, buy a stake in a company and then announce what you bought and watch it soar in value.

Twitter isn’t that large a company. Before today’s rally, its market value of $30 billion placed it at about the middle of the S&P 500. Twitter has 7,500 employees. That’s a lot, but it’s about one-twentieth of Google. It’s not really among the tech giants.

In terms of Elon Musk’s wealth, this investment is pocket change. I’ll be curious to see if he pushes to make any changes in how the social media site is run. Previously, Musk had been vocal in his criticisms of Twitter.

The announcement will be yet another major test for new Twitter CEO Parag Agrawal, who replaced Jack Dorsey after he unexpectedly resigned in November. Agrawal vowed to increase accountability, make decisions faster and to improve product execution. The company set ambitious goals for growth including increasing annual revenue to $7.5 billion and getting to 315 million daily users by the end of 2023.

Musk posted a cryptic meme in December after Twitter announced that Agrawal was taking over from Dorsey as Twitter’s CEO. It depicted Agrawal as Soviet dictator Joseph Stalin and Dorsey as Soviet secret police head Nikolai Yezhov being shoved into water.

I noticed that shares of WD-40 (WDFC) slid to a new 52-week low this morning. WDFC is getting close to a two-year low. I like to take notice when the stocks of good companies do poorly. Of course, no one is safe from the villain of over-valuation. An investment house downgraded it from neutral to underperform.

Posted by on April 4th, 2022 at 10:55 am


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