Twitter shares are soaring nearly 30% in premarket trading following SEC disclosure of Elon Musk's ownership of company's stock.
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Elon Musk now holds 9.2% stake (73,846,938 Twitter shares), worth around $2.9 billion based on Friday's closing price;
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Twitter is a leading communication platform where politicians, economists or institutions post messages and news in real time;
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Relations between Musk and the SEC have been strained in recent times, with Elon Musk being accused of market manipulation by regulator due to his Twitter activity. On one occasion he asked his fans if they thought he should sell 10% of his Tesla holdings, triggering in a panic sell-off
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Elon Musk has recently mulled a creation of an alternative social media of his own, accusing Twitter of censorship and blocking free speech; Musk's Twitter profile is followed by over 80 million people;
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Musk's purchase of a large stake and his previous criticism of the company signals potential for him to become an activist investor in Twitter
The company's shares have been in a downtrend since the end of February 2021. Attempts to rebound from declines in July and October ended with a sell-off of the company's shares. Investors' concerns increased after the presentation of Q4 2021 results and a projected slowdown in 2022. The sell-off reached its panic peak on the day of Russia's invasion of Ukraine on 24.02 and since then buyers have been trying to buck the trend. An open near USD 50 would mean breaking the 38.2% Fibonacci retracement of the downtrend, which also coincides with the local price bottom of 14.05.2021. If the bulls manage to hold the USD 50 level, growth could potentially accelerate to the area of USD 62 per share.
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