The focus of international investors today continued to be new anti-Russian sanctions, concerns over inflation, the highest in 40 years, and a potential slowdown in the U.S. economy.
The Dow Jones Industrial Index, which ended the trading session on Monday, April 4, up just 0.3%, could have been lower during the day had it not been for one thing.
Why is Elon Musk buying up Twitter? Photo: Business Insider
The occasion for powerful buying in the U.S. tech sector was the announcement by Elon Musk that he has already bought more than 9% of Twitter (TWTR). This acquisition made him the largest holder of the company’s common stock. According to FactSet, founder Jack Dorsey’s stake is about 2.3%.
The market has speculated that the car billionaire has deeper interests in the social network than just investment interests. It has been suggested that this could involve both a significant increase in his stake in the company and a more aggressive role in its management, MarketWatch writes.
Why Elon Musk is buying up Twitter
According to analysts at AE Wealth Management, the trend toward a more communicative business is increasing. Previously, showing “emotion and humanity” was not considered the norm, but now, just for the ethical treatment of animals, companies can attract millions of investment money from the public to buy their stock. It is the factor of “communication” with society that analysts consider crucial for Musk’s investments.
Entering the social media market is an unusually difficult task today, and the failure of Donald Trump’s Truth Social likely also influenced the decision to enter the capital of a ready-made business rather than create something from scratch.
Against this backdrop, not only did the social network’s paper gain more than 27%, returning to a $40 billion capitalization, but the entire tech sector was under the scrutiny of buyers. The Nasdaq, which gained 1.9%, would confirm this. Amazon (AMZN) +2.93%, Nvidia (NVDA) +2.43%, Apple (AAPL) +2.37%, Advanced Micro Devices (AMD) +2.16%, Alphabet (GOOG) +2.09% were the leaders.