Dogecoin (DOGE) is up 11% per Messari data following Twitter’s (TWTR) announcement of Elon Musk as the newest member of its board of directors.
As part of the deal to join the board, Musk has agreed to not bring his stake any higher than 14.9% from the current 9.2%. Twitter CEO Parag Agrawal and Musk exchanged tweets Tuesday morning expressing their excitement and interest in working together. Agrawal: “Through conversations with Elon in recent weeks, it became clear to us that he would bring great value to the board.” And Musk: “Looking forward to working with Parag and Twitter board to make significant improvements to Twitter in coming months!”
It’s the second spike higher in two days for dogecoin on Musk/Twitter news. While yesterday’s move quickly reversed, DOGE today has continued to add to gains, now topping $0.16 for the first time in two months.
The bull case: Musk over the past few months has been a “pumper” of Dogecoin, even allowing for DOGE to be accepted for payment at Tesla’s supercharging stations and its online merchandise store. Now the largest individual owner of Twitter shares and a board member, Musk could push for DOGE payments to somehow be integrated into the social media company’s platform.
That doesn’t add up to Bob Iaccino chief strategist at Path Trading Partners and co-portfolio manager at Stock Think Tank. “It’s wishful thinking on the part of those invested in dogecoin,” said Iaccino. “If anything, his position on Twitter’s board makes it harder for him to use Twitter (if we were to assume he was deliberately using Twitter for this purpose) to pump the price of anything at all. He is in much more specific danger of regulatory action if he does that.”
“The speculation is that advertisers could be able to pay DOGE for ads and for other uses on Twitter,” said Kryptomon CMO Tomer Nuni, giving a bit more credence to the bull case. “We have seen the same happening when Tesla revealed the ability to pay for its goods with DOGE, so the speculation could be around Musk’s businesses and stakeholdings starting to accept crypto, as Tesla does.”
As has become a habit for the Tesla CEO, this week’s actions might already have him on the SEC’s radar. Regulatory filings show that Musk filed a form 13G with the agency on Monday, April 4, officially reporting his ownership of more than 5% of Twitter. The form, however, states the person acquiring said securities is doing so “not with the effect of changing or influencing the control of the issuer,” which would include joining the board.
If the buyer of shares wishes to become an activist, or join the board, that would require the filing of a form 13D in which those intentions would be stated.
“It’s possible his securities lawyers think they’ve found a clever loophole that lets him use the short form,” a lawyer on Twitter wrote.
Dogecoin was having a good month prior to this week’s news, and is now higher by 30.6% over the last 30 days, according to CoinDesk data.