Elon Musk +9.2% Stake in Twitter

So news out, Elon Musk has accumulated a 9.2% stake in Twitter. And when I first saw it I thought, okay, I had seen the headlines, I guess, it was last week where he was making posts about is a new platform needed, and interpreted that as a new social media platform.

He had the poll. Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle? 70% said no. And so I thought, okay, that makes sense. Why start your own platform when you could just buy a 10% stake in this one and then try to get on the board, or petition management to turn it into what you want. I guess that makes sense. So let’s jump into the chart.

So what’s interesting here, and I’m a trader, so I look at this from the technical perspective, the stock’s up 27% today. He bought 3 billion dollars worth of stock, 73 million shares. I looked at the SCC filing. It’s a 13G not a 13D. 13 G is for a passive stake. And the date on it is March 14th. So it’s a little late to get filed. And it’s actually interesting because these posts that he had from last week were all after he was already a 10% owner of Twitter.

So the consequence of this poll will be important, and please vote carefully. So that seems to me like an activist investor type of stuff, but what do I know? Who knows? He officially has a passive stake. You have to do a 13D if you’re going to have an active investment where you’re going to try to petition change and things like that. So Carl Icahn, Bill Ackman, they would be filing 13D not 13G. But I mean, anyways, maybe he could refile as a 13D down the road.

So, I kind of find it interesting, because free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle? I mean, it seems obviously like the 22 million votes, 70% saying no, is pretty clear, but I don’t really know. I don’t use Twitter. I’m not a controversial person. I don’t post controversial things, so Twitter’s not really the place for me. I like to post helpful videos. I like to post things about the market, my commentary, stuff like that.

So I like YouTube. YouTube’s owned by Google. YouTube definitely limits what could be posted. I mean there’s, there’re terms of use of YouTube, and if you break them you could get your account shut down. Twitter doesn’t seem as rigorous as Google, to me, in just sort of my perspective, but that’s only, I mean, I’m a bit of an outsider, because like I said, I don’t really use Twitter all that much. I don’t even have an account here. I’m just looking at it just as a free user.

But it’s definitely interesting. And he’s up a billion dollars overnight on the news that he took this stake. Twitter’s up 28%. And so to me, the logical thing is to use that influence to petition the board, to petition the company to make changes, which is more of an activist position. But I don’t know. I mean, that seems like what it would be. And it seems like potentially, from an investment standpoint, that could turn the company into more of what he wants it to be. And if that also means it’s more profitable, then that will show in the quarterly earnings and things like that. The market’s pricing in that it’s already worth 28% more just today because of his involvement, but it’s a passive involvement based on the filing. So it’s a little funny. I’m not taking a long term stake in it. If this was Carl Icahn or Bill Ackman, they’re investors. I mean, I look at them as investors, not entrepreneurs.

But at the same time having an entrepreneur take, I mean they are entrepreneurs, I guess. They’re so involved. I don’t know. I think of them differently than I think of Elon Musk, but he certainly has such influence, and he’s so well respected in the business world that him coming in taking the stake is a big deal. And people think it means good things for the company. So we’ll have to find out. From this perspective right here, if it was Bill Ackman or Carl Icahn, I’d be thinking, okay, are they going to try to petition the company or position the company for a company out to get taken private, or bought out, or merged with another company? I’d be thinking about something like that.

But I don’t think that, really, with Elon Musk. I’m thinking that this is such a small investment from the perspective of his wealth that he can take this investment and if it allows him to get Twitter to be the platform that he thinks it thinks it should be that’s in line with his view of how Twitter should run, as a public town square, so to speak, which is from one of his tweets the other day. So I don’t know. I thought it was interesting. I’d be curious to hear your thoughts. Do you think he’s going to be really more of an activist investor? Do you think he’s going to be just a passive investor? He’s got 8 million followers. Donald Trump had, I think, 88 million and said, “Got kicked off. I’m going to start my own thing, True Social.”

I have another video that I’ve got coming out about that, and that seems like it’s been a disaster in terms of the launch of True Social. It has not been a successful launch by, I don’t think, I mean, at least from my perspective. Again, it’s just as a trader, but seeing how it’s gone is not super impressive. I feel like Elon Musk would definitely do a much better job of launching his own platform, but at the same time, he’s up a billion dollars overnight on his investment of Twitter. And he’d be probably out of pocket a huge amount of money if he was going to start his own platform. So yeah, why not buy into a platform and then help it get to where it needs to be? Seems like a lot, it makes sense, but that also seems like a 13D not a 13G, but I don’t know. We’ll find out. So leave your comments below. Curious to hear your thoughts, and I’ll see you guys for the next episode.

As always, I’ll be streaming the Morning Show around 9:00 AM tomorrow, and I’ll give you my watch list of stocks that I’m watching. We’ll see if we get any action. This morning I was watching Twitter and right at the open you got this big squeeze and then this big drop. It was pretty wild one minute opening range candle, which I steered clear of because I thought it was too risky. Once it reclaimed the volume weight average price, that’s when we got this late morning curl, which is led to this move on up into the 50s. So looking better now, but probably a harder one for day trades, an easier one for ride the momentum and see where it takes you. Right now it’s pinched kind of right between the 200 SMA dotted line and the 200 EMA on the daily chart. An interesting daily chart, but a good entry for Elon Musk off the low here, accumulating at some point through the month, I guess, up to the date of that filing, which was the 14th.

So the interesting thing is, on any given day it only had 10, 12 million shares of volume. So would’ve taken some time to accumulate that kind of position, I would think. But anyways, interesting stuff. All right, I’ll see you guys for the Morning Show first thing tomorrow morning. That right there was an entire video with no ads. I don’t monetize my YouTube channel with video ads, which means you guys get to enjoy the content. But do me a favor, please hit that subscribe button and give me a thumbs up and let YouTube know that this channel is the channel to watch if you want to learn about day trading.

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