How to be an elite stock market trader?
Easy.
First, be the richest guy in the world.
Shell out $3B on a 9.2% stake in a publicly-traded tech stock that you often use.
Grab a bag of popcorn and watch the SEC filing announced and the stock soar 26%.
Make an instant $780M appreciation in your purchase, flip it if you want to right away for a profit, or hold it to most likely make another double or triple in your investment.
It seems like it’s that easy for guys like Tesla (TSLA) founder and CEO Elon Musk who announced a monster purchase in the social media messaging company Twitter (TWTR).
Making money isn’t that easy for most people, but Elon isn’t most people.
He has more gunpowder than anyone else and deploying it at this moment is an unequivocal buy signal for tech in the short term.
He usually is the smartest guy in every room and Twitter has been beaten down quite badly in the short-term going from $77 per share down to $31.
Buy low and sell high.
This formula has worked for many people.
Twitter will instantly go from a tech company rough around the edges to now an Elon Musk company.
The brand difference is immense.
First on the cards will most likely be the changing of CEO Parag Agrawal who must be responsible for the acceleration of digital ads you see on Twitter lately.
Agrawal is not Musk’s chosen man and Musk’s decision to dive into Twitter also has an activist investor element to it.
Let me remind readers that it was only just a few days ago that Elon Musk said he is “giving serious thought” to creating a social media platform that would compete with Twitter, saying that the latter has been stifling free speech.
“Free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle?” Musk tweeted in a Twitter poll.
The next day, Musk took it a step further, writing: “Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?”
In the same thread, a Twitter user asked the Tesla CEO about possibly “building a new social media platform” that would boast “an open-source algorithm.”
The user proposed that the new platform would be one “where free speech and adhering to free speech is given top priority” and where “propaganda is very minimal.”
There will be an inquisition into the “best practices” at Twitter to see who is behind the mechanisms that lead to what Musk believes is the stifling of censorship.
Naturally, it appears that Musk will be hellbent on securing a board seat and this could be the precursor to additional investments into Twitter that might have him secure majority ownership.
Musk will turn Twitter into what he sees is good for democracy and sadly for investors in the short term, which could plausibly be bad for the share price.
However, if this becomes his pet project, he will want it to succeed in the long-term like everything else he touches which turns into gold and failure is not an option.
Just imagine being part of the umbrella that is Twitter management right now, Musk will most likely push for wholesale management changes at every level.
This is also an indictment of how bad Twitter management has been.
Musk is about to remake Twitter in his own image and what does that mean for tech stocks?
In a world of high uncertainties, this offers an ironclad green light to buy tech stocks.
Certainly, Musk wouldn’t buy Twitter at this time because he believes it is at a high point.
I loaded up last Friday in tech and I believe much of the short-term bad news in technology stocks is priced into shares and we have a lull before earnings season in which there is a chance for tech stocks to make up lost ground.
The last nugget I want to throw out to readers is that Twitter could become the vehicle in which Musk develops his passion for cryptocurrency.
This would dovetail nicely with Musk’s tendency to pull workers from Tesla and Space X in order to harness synergies.
