BREAKING: Feds Open Investigation Into Elon Musk: ReportMay 25, 2022
The U.S. government has reportedly opened an investigation into Tesla CEO Elon Musk’s business dealings regarding his $44 billion purchase of Twitter.
“The Securities and Exchange Commission is probing Mr. Musk’s tardy submission of a public form that investors must file when they buy more than 5% of a company’s shares,” The Wall Street Journal reported. “The disclosure functions as an early sign to shareholders and companies that a significant investor could seek to control or influence a company.”
“The Tesla Inc. chief executive made his filing on April 4, at least 10 days after his stake surpassed the trigger point for disclosure. Mr. Musk hasn’t publicly explained why he didn’t file in a timely manner. Mr. Musk likely saved more than $143 million by not reporting that his trades had crossed the 5% threshold, said Daniel Taylor, a University of Pennsylvania accounting professor, since the share price could have been higher had the market known of the billionaire’s growing stake,” the report continued.
“Investors who cross that line are required to file a form with the SEC revealing their stake within 10 days. Mr. Musk’s holdings topped 5% on March 14, securities filings show, meaning he should have disclosed his stake by March 24 under SEC rules. After March 24, Mr. Musk purchased roughly $513 million worth of stock at prices between $38.20 and $40.31 a share, according to a regulatory filing. The total buying spree made him Twitter’s largest individual shareholder with 9.2% of its shares. Based on Twitter’s closing price of $49.97 on April 4, the day Mr. Musk disclosed his stake, he likely saved more than $143 million on those trades, Dr. Taylor estimated,” the report added.
“The case is easy. It’s straightforward. But whether they’re going to pick that battle with Elon is another question,” said Dr. Taylor, referring to the prospect of a regulatory lawsuit against the outspoken entrepreneur.
Earlier this week, Musk said he would reverse Twitter’s permanent ban of former President Donald Trump if his bid to buy the social media company is successful.
Musk told the Financial Times that the ban “was morally wrong and flat out stupid.”
Last month, Trump said he “probably” would not return to Twitter if Musk reinstated his account.
In an interview with Sirius XM’s Americano Media, Trump said he “probably wouldn’t have any interest” in returning to the platform, where he had almost 90 million followers.
“You know, Twitter has become very boring. They’ve gotten rid of a lot of their good voices … a lot of their conservative voices,” Trump said.
On Saturday, Musk put new and current Twitter employees on notice about getting ready to work.
“Work ethic expectations would be extreme, but much less than I demand of myself,” the billionaire said in a tweet.
The post followed a series of tweets that garnered attention.
On Friday, Musk shared some more of his vision for the platform.
“If Twitter acquisition completes, the company will be super focused on hardcore software engineering, design, infosec & server hardware,” he tweeted Friday morning in a post containing a link to the Fortune story.
“I strongly believe that all managers in a technical area must be technically excellent. Managers in software must write great software or it’s like being a cavalry captain who can’t ride a horse!” he added.
Musk has not officially gained control over Twitter yet, but in anticipation of his purchase deal going through, the platform is getting a lot more attention — to the chagrin of current employees.
Employment interest at Twitter following the SpaceX and Starlink founder’s buyout being accepted by the platform’s board of directors has skyrocketed:
It’s still unclear how a Musk-run Twitter might impact the company’s ability to retain current staff and recruit new employees. The company presented the takeover as a potential threat to its staffing abilities in an SEC filing Monday.
But at least casual interest in open positions at the company has skyrocketed since the Tesla billionaire showed serious interest in taking over the company.
On Thursday, Daniel Zhao, a senior economist and data scientist at the job insights platform Glassdoor, tweeted that interest in job openings at the social media giant was up 263% between April 24 and April 30.
CNBC’s David Fabor reported that Musk is “expected to serve as a temporary CEO of Twitter for a few months after he completes his $44 billion take over of the social media company.”
“The report comes as Musk has secured $7.1 billion in new funding for the deal from a group of more than a dozen investors, including Oracle co-founder Larry Ellison, cryptocurrency exchange Binance, Fidelity, and Brookfield Asset Management. In addition, Saudi Prince Alwaleed Bin Talal Bin Alsaud has agreed to retain his 34,948,975 Twitter shares, worth approximately $1.9 billion,” Fox Business reported.
“As a result of the new commitments, Musk’s margin loan financing for the deal has been reduced from $12.5 billion to $6.25 billion, while his equity financing has increased from $21 billion to $27.25 billion. Musk’s filing with the Securities and Exchange Commission emphasizes that he is currently in discussions with existing shareholders of Twitter common stock, including co-founder Jack Dorsey, regarding ‘the possibility of contributing such shares of Common stock, at or immediately prior to the closing of the Merger, in order to retain an equity investment in Twitter following completion of the merger,’” the report added.