According to a report by The Wall Street Journal, the Securities and Exchange Commission is investigating Elon Musk’s failure to timely disclose that he bought a large amount of Twitter shares last March. As a reminder, the billionaire took a long time to fill out the required public form as he was in the process of repurchasing 9.2% of Twitter shares and becoming the company’s largest shareholder.
This inconsistency particularlybuy more shares without warning other shareholders and therefore save a significant amount of money in the process. Musk is also the subject of a lawsuit by Twitter shareholders and a separate investigation by the FTC on the same issue.
Investigation could derail Twitter takeover
Due to these new investigations into the transaction, Twitter’s stock has dropped more than 10% since Elon Musk’s initial bid. As of market close on Thursday, the stock was trading at $45.08, well below the $54.20 that Musk agreed to pay on April 27. The difference is more than $9 billion in market capitalization.
An investment firm had also advised the billionaire to withdraw from the deal and pay a $1 billion penalty for breach of contract in order to be able to make a new, smaller offer that would better match the current value of the business. Although Twitter’s board has already approved the purchase, the trade can take months to close and there can be no assurance that this will happen.. The investigation will have to determine whether Elon Musk’s actions have had a significant impact on other investors. For now, it’s unclear what penalties Musk could face if the SEC decides to take action against him.
Elon Musk announced from his personal account a little earlier today.suspended the salvationso doing Losing another 25% in Twitter stock in pre-market trading. For now, Tesla’s CEO would have expected more details about the volume of fake accounts found on the platform. According to that, spam and scam accounts make up less than 5% of daily monetizable usersbut this figure needs to be proven.
— Elon Musk (@elonmusk) May 13, 2022