Elon Musk and Twitter

Twitter (TWTR) shares rose sharply by more than 25% on the pre-market on Monday after the media reported the SEC's findings that Tesla CEO Elon Musk had bought a major stake in them.

The surge in shares was likely triggered by a large purchase of shares by Tesla (TSLA) CEO Elon Musk, who is known for his Twitter activity.

According to a 13G Schedule and Exchange Commission (SEC) filing published on Monday, Musk owns 73,486,938 shares in Twitter, representing a 9.2% passive stake in the company. The stake is worth $2.89bn, based on Twitter's closing share price on Friday: $39.31. Musk has more than 80 million followers on Twitter and has previously said that he is thinking about creating his own social network. Musk's purchase of the cryptocurrency dogecoin sparked demand for it among investors, which could in part be repeated with Twitter shares.

Twitter's revenues have been growing quarter-on-quarter for the past year and market analysts say the company still has plenty of room for monetisation and growth.

In December, Twitter got a new CEO, Parag Agrawal, who previously served as the company's CTO. Twitter's Q4 report, published on 10 February, did not cause a meaningful rise in the stock as, like the Q1 2022 forecast, it came in slightly below Wall Street's average estimates. The number of monetised daily active users (mDAU) of Twitter in Q4 increased by 13% (from the same quarter last year) to 217 million. against analysts' forecast of 218.6 million.

A number of analysts have lowered their target prices for Twitter stock, while maintaining Hold Outperform ratings.

Market analysts expect Twitter to monetise better in the future, through digital advertising tools, subscription services, also expecting the results of the company's NFT efforts.

It is worth noting that Twitter's Q1 report is scheduled for 28 April.