Twitter stock soared by around 25% in early trading on Wall Street on Monday following the disclosure that Tesla CEO Elon Musk acquired a 9.2% stake in the company.
Musk's acquisition of a major stake in Twitter was disclosed in a filing with the US Securities and Exchange Commission (SEC).
The shares are held by the Elon Musk Revocable Trust, of which Musk is the sole trustee. Monday's regulatory filing suggests he is seeking to become a long-term investor in the company.
He became the largest Twitter shareholder after questioning the social media platform's commitment to free speech.
In the past, Musk has said he contemplated launching a Twitter rival.
The South African's purchase of 73.5 million shares was worth almost $2.9 billion based on Twitter's stock price at the close of business last Friday.
What is Musk's relationship with Twitter?
Musk is considered the richest man in the world. With over 80 million followers on the platform, he frequently uses Twitter in provocative ways that generate headlines and controversy.
In 2018, Musk tweeted that he had funding to privatize Tesla without providing any evidence.
The Tweet resulted in a spike in the Tesla share price, which the SEC called misleading.
Settlement on allegations of stock price manipulation
Musk agreed that any tweets that would impact Tesla's share price would be screened by lawyers as part of a $20 million settlement deal in a fraud case brought by the SEC.
In early March, Musk requested that a New York judge overturn the portion of the agreement concerning his tweets.
Musk's lawyer argued that the SEC was engaged in "yet another attempt to harass Tesla and silence Mr. Musk."
In a filing, the SEC responded that it has the legal authority to subpoena Musk and Tesla over his tweets. The SEC also argued that Musk's move to throw out the terms of the settlement was invalid.
