The U.S. Securities and Exchange Commission (SEC) has initiated an investigation into Elon Musk’s recent announcement of acquiring Twitter for $50 billion. The SEC is examining whether Musk violated any securities laws or regulations with his Twitter bid on April 14, 2023.
Elon Musk, the business magnate known for his roles in Tesla and SpaceX, made his first tweet on his personal Twitter account in June 2010 and amassed over 80 million followers by April 2022. In 2017, he responded to a tweet suggesting he purchase Twitter by asking, How much is it? Following this, Musk began criticizing Twitter on March 24, 2022, and surveyed his followers on the platform’s adherence to the principle of free speech.
Subsequently, Musk made an offer to buy Twitter at $54.20 per share, valuing the acquisition at around $44 billion, a price significantly higher than the company’s stock price at the time. He expressed his intention to transform Twitter into a private company and apply principles of free speech to the platform, which he claimed had been mismanaged.
Musk’s announcement about securing funding to take Twitter private caused the company’s stock to surge by 35% in a single day. The SEC has raised concerns that Musk may have misled investors or manipulated the market with his statements. The commission is also investigating whether Musk truly obtained the funding he claimed and whether he followed the proper disclosure procedures for such a significant deal.
To gather information related to the transaction, the SEC has issued subpoenas to Musk, Twitter, as well as several banks and investors involved. The regulatory body has requested documents and information from these entities.
This investigation by the SEC could have severe consequences for Musk, who has previously faced legal clashes with the regulator. In 2018, he was sued for fraud after falsely claiming on Twitter that he had secured funding to take Tesla private. Musk settled the case by paying a $20 million fine and stepping down as Tesla’s chairman.
The consequences of potential violations of securities laws or regulations for Musk include civil or criminal charges, fines, injunctions, or even a ban from serving as an officer or director of a public company. Shareholders or regulators who suffered losses or damages due to Musk’s actions could also file lawsuits against him.
Despite the ongoing investigation, Musk has continued to tweet about his plans for Twitter. He aims to make the platform more democratic and decentralized, allowing users to establish their own rules and communities. Additionally, Musk intends to integrate Twitter with his other ventures, such as Neuralink, Starlink, and The Boring Company. He hopes to finalize the deal by the end of 2023, subject to regulatory approval and a shareholder vote.
As of now, Elon Musk has not commented on the SEC’s investigation. The world awaits the outcome of the probe and its potential impact on Musk’s future endeavors.
– CNBC: [Link]
– Reuters: [Link]