Pat Stevens/
Elon Musk is no longer the largest shareholder in Twitter.
It emerged yesterday that asset manager, Vanguard Group, has increased its stake to overtake him.
Vanguard now owns 10.3 percent of Twitter, while Musk owns 9.1 percent of the company, making him the largest individual shareholder.
Musk, whose share is four times that of the only other individual shareholder in the company – founder Jack Dorsey – on Wednesday made a sensational bid for the company, and publicly revealed the plan yesterday morning.
The Twitter board is met yesterday afternoon to consider Musk’s bid to take the company private, and the company will hold an all-hands meeting to update staffers later on, according to CNBC.
Vanguard, led by CEO Tim Buckley, increased its stake in the company at some point during the first quarter, according to SEC filings made on April 8.
Vanguard previously reported owning 67.2 million shares of Twitter or about 8.4 percent of the company as of the end of December, according to FactSet.
Other owners of large quantities of Twitter stock include Morgan Stanley, Fidelity and Black Rock.
Vanguard’s holdings are now worth $3.78 billion, based on Twitter stock’s closing price on Wednesday.
The company frequently sides with management on voting issues, and does not usually advocate for changes like a hedge fund or activist investor might, The Wall Street Journal reported – meaning that they are unlikely to look favourably at Musk’s proposal to buy out the company.
Musk yesterday afternoon tweeted a poll, asking, “Taking Twitter private at $54.20 should be up to shareholders, not the board.”
Earlier yesterday, Musk fired back at a Saudi Arabian shareholder of Twitter who tried to block his $41 billion hostile takeover plan, questioning whether royalty in the notoriously repressive state should exercise control over the social media platform.
In a tweet, Musk responded harshly to Saudi Prince Alwaleed bin Talal, who claimed to be “one of the largest” Twitter shareholders and said he would “reject” Musk’s proposal to take the company private, calling the offer insufficient.
“How much of Twitter does the Kingdom own, directly & indirectly? What are the Kingdom’s views on journalistic freedom of speech?” Musk asked bin Talal.
Bin Talal’s true ownership stake in Twitter is unclear. Though the prince shared a screenshot boasting of his 5.2 percent stake in 2015, his investment firm later reduced its stake below 5 percent, and has not had to report any further transactions, regulatory filings show.
Bin Talal is a cousin to Saudi Crown Prince Mohammad bin Salman, whom the CIA concluded ordered the grisly assassination of Saudi journalist Jamal Khashoggi in 2018. The Saudi government has long ranked near the worst in the world for press freedom.
Meanwhile the Twitter board, meeting yesterday afternoon, is considering combatting Musk’s takeover bid with a so-called “poison pill” provision that would prevent the Tesla CEO from increasing his stake in Twitter, a source told the Wall Street Journal.
Also known as shareholder rights plans, poison pills typically trigger an automatic stock dilution through a flood of new shares if a corporate raider’s ownership stake grows too large. In Twitter’s case, the idea would be to prevent Musk from increasing his 9.1 percent stake in order to pressure the board to accept his deal.
In separate tweets, Musk argued that it “would be utterly indefensible” not to allow shareholders to vote directly on his plan. “They own the company, not the board of directors,” he wrote.
Twitter shares closed down 1.68 percent yesterday after a volatile session, ending the shortened trading week at $45.08 – well below Musk’s offer price of $54.20, in a sign that markets do not view his bid as likely to succeed.
Musk, speaking at the TED2022 Conference in Vancouver on Thursday afternoon, defended his takeover bid, saying he was motivated to transform Twitter into a bastion of free speech.
“This is not about the economics,” Musk said.
“My strong intuitive sense is having a public platform that is maximally trusted and broadly inclusive is important to the future of civilisation.
“The civilisational risk is decreased the more we can increase the trust of Twitter as a public platform,’ he said.
“Twitter has become kind of the de facto town square, so it’s really important that people have both the reality and perception that they are able to speak freely, in the bounds of the law.”
Asked whether there is a “Plan B” if the Twitter board rejects his bid, Musk responded “there is”, but declined to offer further details, saying that he would elaborate further at “another time.”
Though regulatory filings suggest that his bid is contingent on anticipated financing, Musk insisted that he had the resources on his own to complete the transaction, saying, “I have sufficient assets…I can do it.”
At the TED conference, Musk laid out his vision for Twitter, saying that he believed the source code for the site’s algorithm should be openly shared on GitHub.
“Having a black box algorithm that promotes some things and demotes others is really dangerous,” he said.
He said that permanent bans from the platform should be rare, and that the only limits on speech should be the legal limits imposed by the governments of countries Twitter operates in.
“A good sign as to whether there is free speech is when someone you don’t like, is allowed to say something you don’t like.
“If that is the case, then you have free speech,” said Musk
However, he did not directly address whether he would reinstate former users who have been banned from Twitter, a category that notably includes Donald Trump.
0