Elon Musk’s initial purchase of Twitter stock, which the Tesla CEO said started at the end of January and continued until the beginning of April, is now reportedly being examined by the Federal Trade Commission (FTC).
Musk purchased a 9.1 percent stake in social media platform Twitter over the period of several months. Initial reports of his stake in Twitter were not published until this month, but Musk started purchasing the shares in January.
However, the FTC is looking into whether Musk obliged with an antitrust reporting requirement as he accumulated his massive stake in the company before ultimately reaching terms with Twitter’s board to purchase the platform for $44 million earlier this week. The Information is now reporting that Musk’s non-disclosure of the initial share purchases may have violated the antitrust reporting requirement.
The report states:
“At the heart of the inquiry is whether Musk was initially buying as someone who wanted to influence Twitter management or whether he saw himself as more of a passive shareholder. Notably, Musk’s initial filing with the Securities and Exchange Commission categorized his purchase as a passive stake—which immediately raised questions given his public comments about how Twitter is run.”
Musk’s purchase of shares may also violate SEC deadlines of when shareholders are required to disclose that they own more than 5 percent of a company, the report said. Musk filed this three weeks after he passed the 5 percent threshold, which violates the agency’s timeframe.
The report states there is no known significance of Musk potentially breaching the reporting requirements, but it definitely puts the deal in question before the merger between Twitter and Musk’s “X Holdings I, Inc.” is actually completed. According to an 8-K filed with the SEC earlier this week, Twitter said it plans for the merger to be complete by October 24, six months to the day of the announcement of Musk’s acquisition.
The news comes just hours after FCC Commissioner Brendan Carr rejected a request to block Musk’s purchase of Twitter.
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