Twitter rose more than 30% in two days! Musk was named a director of Twitter, vowing to make significant improvements to the platform

Social media giant Twitter surged more than 27 percent on Monday, its best single-day performance since the first day of its IPO closed in 2013, and continued to rise on Tuesday, April 5, rising more than 9 percent during the session and falling back to more than 4 percent in midday gains, or a five-month high since mid-November last year.

Twitter's stock price rose more than 32% in two days, all related to the dynamics of Tesla CEO Musk. After disclosing on Monday that he held a passive stake in Twitter, becoming Twitter's largest individual and outside shareholder, he was invited to Twitter's board on Tuesday.

Following the unexpected resignation of former Twitter CEO and co-founder Jack Dorsey last November, Former Chief Technology Officer Parag Agrawal, who took over as CEO, said Tuesday that through conversations with Musk in recent weeks, it was clear that he would bring tremendous value to the board. As a "fanatical believer and strong critic" of Twitter's service, I believe his joining the board will make Twitter stronger in the long run.

Musk also responded immediately, saying he looked forward to working with Agrawal and Twitter's board of directors to make "significant improvements" to the social media platform.

In fact, immediately after Musk disclosed his large stake in Twitter yesterday, he immediately launched a poll to ask users about their interest in adding a "re-editing function" to tweets. Sure enough, more than 70% of voting users wanted such an edit button.

Twitter currently prohibits users from re-editing tweets that have already been posted, a potential change that, if true, would represent a major shift in Twitter's products. Twitter CEO also retweeted Musk's post yesterday, urging people to "vote with caution" because the result will be "important."

From Twitter's point of view, inviting Musk to join the board can prevent the world's richest man from taking a controlling stake in Twitter in the short term. Because compliance documents filed with the SEC of the U.S. Securities and Exchange Commission show that Musk's director term will end in 2024, Musk must not be the beneficial owner of more than 14.9% of Twitter's issued common stock for the entire director's term or for 90 days after the end of the director's term.

Although Musk's regulatory filing yesterday stated that he had no intention of seeking to control or change Twitter's operations, some investors and observers still do not rule out the possibility that Musk will take an aggressive stance, including increasing his stake in Twitter to having a controlling stake to drive change. Unlike Musk, who owns more than 20 percent of Tesla, co-founder Dorsey holds only 2.3 percent of the company's stake in Twitter.

Truist Securities said in a research report yesterday that considering that holding a 9.2% stake in Twitter only accounts for about 1% of Musk's $273 billion net assets, no matter how much investment is only a small amount of money for Musk, "we will not be surprised that he will further increase his stake in Twitter, and may play a more active role in the company's decision-making." At Last Friday's close, the shares were worth nearly $2.9 billion.

As a "heavy Twitter user", Musk has a huge influence of more than 80 million fans on the platform, and he criticized some of Twitter's content control policies 10 days before disclosing the large holding, and even jokingly asked netizens "Do you want a new social media", all of which have opened up a huge imagination space to the outside world and become the main reason for Twitter's recent surge.

Dan Ives, an analyst at Wedbush, a well-known brokerage in Tesla analytics, said that given Musk's enthusiasm for reforming social media, he may try to take a more aggressive (or radical) stance on Twitter, which could eventually lead to some form of acquisition:

"We believe Musk's addition to Twitter's board will lead to a range of strategic initiatives, including a range of near- and long-term possibilities, to break the company's woes in the social media arms race." It's time to pull out popcorn and watch what's going on in the coming months. ”

Interestingly, after the news of Musk's large stake in Twitter and joining the latter's board of directors, Musk's virtual digital currency Dogecoin has also risen sharply in the past two days and hit a two-month high. That's because Tesla previously allowed dogecoin payments to be accepted at its supercharger stations and online stores, and now there's speculation that Musk could push for the integration of Dogecoin payments into Twitter.

But Bob Iaccino, chief strategist at Path Trading Partners, isn't bullish on that. He believes that joining The Twitter board is actually a constraint on Musk's words and deeds, making it more difficult for him to use Twitter to raise the price of anything, "if he does, he will face the risk of more specific regulatory action", and joining the Twitter board is equivalent to putting Musk under the SEC's magnifying glass once again.

In addition, the analysis generally believes that Musk's investment is at a critical moment for Twitter. The new CEO is under pressure to meet the company's ambitious internal goals, including increasing the monetizable daily active users (mDAU) from 217 million at the end of last year to 315 million by the end of 2023. In the fourth quarter of last year's earnings report released in February, Twitter's revenue, earnings and user growth were all worse than market expectations.

Billal Hafeez, CEO of financial market research firm Macro Hive, pointed out that musk has great expectations for Accelerating Twitter's change because twitter's revenue growth model is problematic and the aggressive goals set for daily active users are too likely to be achieved. While the company's revenue growth did pick up during the pandemic, it wasn't as big as many other social media platforms during the same period.

For now, Twitter shares are still down 38% from their all-time highs in February 2021.