Elon Musk’s Initial Twitter Participation Under FTC Investigation: Report

  • The Federal Trade Commission has opened an investigation into Elon Musk’s initial involvement with Twitter, The Information reported Thursday.
  • The regulator is looking into whether Musk violated antitrust reporting requirements when he amassed a 9% stake earlier this year.
  • It wouldn’t be Musk’s first encounter with financial watchdogs, as the SEC has already investigated his tweets regarding Tesla.

As Elon Musk has reached a $44 billion takeover deal for Twitter, the Federal Trade Commission has opened an investigation into whether his initial stake in the social platform violated reporting requirements, sources said. . information Thusday.

Musk amassed a 9.2% stake between January and April this year, and the investigation aims to clarify whether the Tesla CEO bought the shares with the intention of influencing the direction of Twitter, or whether he intended to remain a passive shareholder, according to The Information.

Musk’s stake was originally disclosed via a 13G filing, which indicates passive stakeholding, or where a shareholder is not trying to exert influence.

But a later 13D filing instead confirmed that the Tesla chief must have been an active investor seeking control of Twitter’s business and operations. Twitter CEO Parag Argrawal also announced that the company would appoint Musk as a member of the board, signaling his status as an active investor.

Separately, some have wondered if Musk didn’t leak his 73.5 million Twitter shares in time. He had reported it three weeks after crossing the 5% threshold.

Shares of Twitter rose 1.6% to $49.40 on Thursday, still below Musk’s acquisition price of $54.20 per share.

It wouldn’t be his first encounter with financial watchdogs. In 2018, the Securities and Exchange Commission accused the billionaire of misleading investors after he said – via Twitter – that he was considering taking Tesla private and secured the necessary funding.

As the SEC finally reached a regulation with Musk, it included an agreement that Tesla would have to approve all of Musk’s tweets containing information that could alter the company’s stock price. And this part of the agreement has been the subject of recent controversy.


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