Elon Musk has been making moves on Twitter (TWTR). As a result of the whole saga, Dogecoin (DOGE-USD) might get accepted as a form of payment at Twitter.
Last week news emerged that he owned 9.2% of the stock. The Tesla (TSLA) and SpaceX CEO apparently was offered a position on the board of directors. But the board told him he could only buy up to 14.9% of Twitter.
That might not have gone down so well with Musk, as well as their requirement that he undergo a "background check" as well as act in the interests of all other shareholders. Then on Friday, April 8, both Musk and the board agreed he would not join the board.
However, one change that Musk made was that Twitter should now accept Dogecoin (DOGE-USD) crypto as a form of payment. He made this recommendation in a series of tweets right after his stake was exposed.
This was probably one of the more practical recommendations he made. For example, another one was that the company should not depend on advertising revenue. The problem with that is Twitter depends on ads for 90% of its revenue. So that is not going to happen.
Twitter May Have to Accept Dogecoin
There is no indication yet whether Twitter will accept Dogecoin. But the social media company may have to listen to Musk. For one, he is not now limited to only owning up to 14.9% of the company. Theoretically, he could take his stake up to 19.9% of Twitter. After that, he could propose to buy a controlling stake.
This means that Twitter may have to listen to Musk. He has the wherewithal to put a huge amount of pressure on the company from the outside. Here is one reason why. Typically most shareholders do not vote. They leave their votes up to others, like brokerage firms. Musk could propose a change in a formal way at a shareholder meeting or a special meeting that Twitter start accepting Dogecoin. There would be a high likelihood the proposal would pass.
Forbes magazine reports that Dogecoin could rise as a result of Musk's support for it as a form of payment over Bitcoin (BTC-USD) and Ethereum (ETH-USD). However, since the end of March Dogecoin has spiked from 13.31 cents to a peak of 17.29 cents on April 5 when the Musk comments were made. As of April 11, it was back down to 13.55 cents - more or less a wash.
*********
By the way, don't forget to fully "Follow" me and make sure to download the Newsbreak app to become a Registered Follower. This way you can also see all my articles in the past. Click on the link underneath my profile name.
This is not financial advice and you should not rely on my analysis to buy or sell any stock. I am not undertaking to induce you to buy or sell any securities.
I am relying on the “publisher’s exclusion” in the Investment Advisers Act of 1940 to provide this information without any personalized or individualized investment advice.
Mark Hake writes articles on InvestorPlace.com, Barchart.com, Medium.com, and Newsbreak.com on stocks and cryptos.
Comments / 1