While the world was tweeting about Elon Musk’s 9% stake and bid to takeover Twitter (TWTR US), Vanguard quietly disclosed that it was the largest shareholder in Twitter holding over 10% of the company shares outstanding. Together, the top 3 passive managers (total assets under management), Blackrock ($10 tn), Vanguard ($8 tn) and State Street ($4 tn), own over 20% of Twitter. Passive is Massive!
Theoretically, active managers set prices and passive managers are not motivated by price, buying what is in the index. However, as passive managers grow in size, their coordinated trading can sometimes turn them from price-takers to price-makers with significant influence in their voting power. The high costs of active engagement and lack of incentives to engage actively, means that passive houses often vote in line with management and in sync across all their funds.
As we follow Musk’s activity in Twitter, it’s also interesting to note that Vanguard holds over 6% of Tesla.
Top Shareholders in Twitter and Tesla
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