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Elon Musk Is Diversifying the World’s Biggest Fortune With Twitter Stake

(Bloomberg) — For years, Elon Musk’s net worth has been dominated by one stock: Tesla Inc.

His purchase of a 9.2% stake in Twitter Inc., disclosed in a regulatory filing on Monday, adds an unusual element of diversification to his $273 billion fortune.

Musk’s stake in his favorite social-media platform was estimated on Friday at around $2.89 billion by market. So far they’ve done well: The billionaire is worth over $1 billion based on Twitter’s closing share price on March 14, the date of the event that triggered the disclosure, and its opening trading level on Monday.

Even though Musk is now Twitter’s largest shareholder, his holdings still represent a fraction of his net worth. As of Friday, the majority of Musk’s net worth was tied to shares and options in Tesla, where he is chief executive officer. He owns about 17% of the electric-vehicle maker, which has increased in value in recent years and propelled Musk to the top of the list of the world’s richest people.

Musk, 50, owns nearly half of private space exploration company SpaceX, which is worth $40.3 billion, according to the Bloomberg Billionaires Index.

The Tesla co-founders are focusing on the company, even as their fortunes soar. His family office, Accession, is run by longtime advisor Jared Birchall, a former Morgan Stanley banker, and is relatively small compared to other billionaires.

Musk doesn’t have much in the way of real estate after selling several mansions in California and vowing to have a “home without” in 2020. He disposed of his very small stake in Tesla until the end of last year, when he sold millions of shares. There was an $11 billion tax bill related to exercising the options to cover the cost of what he said.

Even after his estimated taxes, proceeds from those sales left Musk with a cash holding of more than $5.7 billion, according to the Bloomberg index, before acquiring Twitter shares.

Musk also revealed that he would become a philanthropist at the time. Last year he donated more than 5 million Tesla shares, worth about $5.7 billion. It came weeks after Twitter suggested it would sell stocks if the United Nations proved that $6 billion would help solve world hunger.

It’s unclear where exactly that record donation to the billionaire went. He has a foundation, the Musk Foundation, which has historically given less than $50 million a year, mainly to donor-advised funds. Musk has hired a professional poker player-turned-philanthropist to help him extort money.

Musk has become one of the biggest celebrities on Twitter with over 80 million followers. Sometimes he also gets into trouble. He wants to exit a 2018 deal with the US Securities and Exchange Commission that limited his positions about Tesla.

The type of SEC form they used often indicates that the investor is not trying to gain control of a company, or to influence who controls it.

—With assistance from Tom Maloney and Sophie Alexander.

To contact the author of this story:
Devon Pendleton in New York [email protected]

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