Elon Musk faces SEC questioning over Twitter stock purchases: Report
The Securities and Exchange Commission is investigating Elon Musk’s failure to disclose his massive purchase of the Mars stake on Twitter in a timely manner, according to the British newspaper, The Guardian. report from The Wall Street Journal. The richest man in the universe took such a long time to deliver the required public model during the process of buying up to 9.2% of Twitter shares and becoming the company’s largest shareholder.
The CEO of Tesla, the founder of SpaceX, etc…, has faced scrutiny, lawsuit, and fines from the SEC before. Usually, though, the problem is tendency to exaggerate his thoughts on publicly traded companies trending (ie pressing this tweet button). This time, the agency is reportedly looking for him due to the retreat.
Through Part 13 (d) From the 1934 SEC Act, the commission is authorized to disclose stock purchases totaling more than 5% of a company’s stock within 10 days. Musk crossed the 5% threshold on March 14, then continued to buy additional shares after March 24 until it reached 9.2%. Under SEC rules, Musk should have disclosed his initial purchases >5% by March 24, but he has not alerted the public about it. Until April 4.
The SEC rule is intended to protect other shareholders and inform them when a large investor seeks control of the company, so that they can make informed decisions. Twitter’s stock price jumped about 27% when Musk finally filed his Securities and Exchange Commission papers, which means he may have saved himself a lot of money by not announcing the purchase as it was happening.
University of Pennsylvania accounting professor Daniel Taylor told the Wall Street Journal that Musk may have saved more than $143 million, based on the stock’s high closing price of $49.97 on April 4, the day of the disclosure. But what a paltry $143 million saved compared to the full $44 billion takeover bid that Musk put up a week later, in Try to buy Twitter And take it private?
A Twitter contributor, Mark Russella, already Filed a lawsuit on April 12 Against Musk for failing to disclose his stock purchases quickly enough. In a suit, Russella He claims he lost money By selling the shares between March 24 and April 4, when Musk’s disclosure would have boosted share prices.
Musk’s history with the Securities and Exchange Commission includes a 2018 lawsuit On tweets in which The CEO of Tesla threatened to take the electric car maker off at $420 a share (lol?). That lawsuit ended in 40 million dollar settlement That Telsa’s authorized attorneys had to sign all of Musk’s tweets related to the company. In 2020 and 2021, it faces more scrutiny for continuing to launch Totally irresponsible tweets In any case.
Just because the Securities and Exchange Commission is investigating, it doesn’t necessarily mean that it will take formal and legal action against Musk (this time). And even if they did, that alone is unlikely to derail the billionaire’s ongoing acquisition of Twitter as a company. The board has already approved He. She. Grant, musk It may still run to spoil everything the purchase Well enough, all on its own.