Elon Musk just paid $2.98 billion for a 9.2 percent stake in Twitter's microblogging network.
Twitter's stock price reacted predictably, surging 26% in pre-market trade. This is fuelled in part by Musk's surprising stock purchase following his statements last week on free speech, online propaganda, and his "serious consideration" of launching his own social network to compete with Twitter.
Musk currently controls 73,486,938 shares of Twitter, according to a Securities and Exchange Commission 13G filing issued today, according to CNBC. The $2.98 billion valuations is based on Twitter's share price on Friday, so if the 26 percent price rise maintains, he's already made a large on-paper profit.
Although his Twitter holding is classified as "passive," it is being considered as a possible first step in a larger effort by the billionaire for more control. "Musk might try to take a more active posture here on Twitter," Wedbush analyst Dan Ives said on CNBC Squawk Box, adding that his investment could eventually lead to a takeover effort.
A takeover would make sense given his recent statements about starting his own network. Why create a new platform when you can buy one that already has more than 200 million users?