Louis Navellier is rating this stock an “A” – Get In Now!

On May 24, the man who found “the stock of the century” will reveal one of his top stocks for 2022 – for FREE – in a special presentation.

Tue, May 24 at 4:00PM ET

Twitter Stock Soars on News Elon Musk Bought 9.2% of the Company

TWTR stock - Twitter Stock Soars on News Elon Musk Bought 9.2% of the Company

Source: Sattalat phukkum / Shutterstock.com

Shares in social media platform Twitter (NYSE:TWTR) soared in premarket trading after news broke this morning that Elon Musk now owns 9.2% of the company. Bloomberg broke the news of a March 14 regulatory filing that shows Musk bought a stake that would be worth about $2.89 billion based on Friday’s $39.31 close price. Musk now owns 73,486,938 shares of TWTR stock. The world’s richest man sees something in Twitter that makes it worth such a large investment. Does that mean you should consider buying TWTR stock as well?

Like many tech companies, Twitter has seen its shares caught up in a broad market pullback. By early March, TWTR stock had slumped 24% from the start of the year. At that point, it was down nearly 60% from February 2021 levels. Challenges that began to impact the stock’s value in 2021 included concern over slowing U.S. user growth and the potential impact of Apple’s (NASDAQ:AAPL) iOS privacy changes. However, the stage was set for a resurgence when co-founder Jack Dorsey stepped down as CEO of Twitter last November.

Elon Musk is one of Twitter’s most famous (or infamous) users. He has over 80 million followers on the platform. He takes to Twitter frequently, and his tweets have had serious consequences in the past. Most notably, Musk’s tweets about possibly taking Tesla (NASDAQ:TSLA) private in 2018 netted him $40 million in fines and required him to step down as Tesla chairman.

Given Musk’s fondness for the platform, the huge stake in TWTR stock raises an obvious question. Does he have designs on the company? As CNBC points out, there have been clues from Musk in recent weeks. In March, he tweeted that he was giving serious thought to building a new social media platform. Less than two weeks ago, he started a Twitter poll over whether Twitter was failing to “adhere to free speech principles.” Clearly he has something on his mind here. Wedbush analyst Dan Ives told CNBC there’s a chance this could eventually “lead to some sort of buyout.”

Will Elon Musk’s big move end up kicking off a sustained rally in TSLA stock, or will there be a correction? At this point — with TWTR still up over 20% in early morning trading — it’s clear that the market is expecting some wort of bigger move from Musk. If you want to get in on the action, now would be the time to act. And if you’re worried that shares are being pushed to completely unrealistic levels, keep in mind that even with today’s premarket surge, TSLA stock is still priced far below the levels it traded at for much of 2021.

On the date of publication, Brad Moon did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Brad Moon has been writing for InvestorPlace.com since 2012. He also writes about stocks for Kiplinger and has been a senior contributor focusing on consumer technology for Forbes since 2015.

Article printed from InvestorPlace Media, https://investorplace.com/2022/04/twitter-twtr-stock-soars-on-news-elon-musk-bought-9-2-of-the-company/.

©2022 InvestorPlace Media, LLC