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Elon Musk in trouble. He saved millions because he “forgot” to send the report? There is an investigation

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Elon Musk informed the public about the purchase of a huge pool of Twitter shares in the first days of April. The billionaire and now the richest man in the world then bought 9.2 percent. stocks worth $ 2.89 billion, becoming the company’s largest shareholder, but he did not stop there. Currently, he is in the process of purchasing the entire Twitter, which is expected to cost him as much as $ 44 billion.

SEK has doubts. Another investigation into Elon Musk

It turns out, however, that Musk may have another problem on his way to taking power on the popular social networking site. Like, the US Securities and Exchange Commission (SEK) has doubts about the correctness of the transaction reporting procedure.

The commission believes that the billionaire was late informing it of this fact. According to American law, acquiring more than 5 percent. of shares of a given company within 10 days of purchase must send to SEK a special form informing about the investment made. This is a warning signal for other investors that someone may seek to gain control or influence the company’s decisions – writes “WSJ”.

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Musk the 5 percent threshold. was supposed to exceed on March 14, so the documents should be submitted to the committee on March 24 at the latest. Meanwhile, the billionaire did not submit his report until April 4, which means that he was 11 days late with the reporting obligation to the SEK.

It’s not about staring, but about millions of dollars

Elon Musk, who controls several of his own businesses, is an extremely busy businessman, but it can be assumed that his sluggishness might not have been due to forgetfulness or distraction. The process of purchasing such a large pool of shares does not take several hours, but is spread over a longer period of time. And as it is speculated, it could have been the case here.

After March 24 (when the deadline for submitting the report to SEK expired) Musk continued to buy more Twitter shares at the current rate. Meanwhile, after the announcement of the purchase of the pool, 9.2 percent. Twitter shares, The company’s shares on the stock exchange closed the day with a 27% gain.

So, had Musk announced his purchases on time, Twitter’s stock valuation would have come sooner. Consequently, the billionaire would have to pay more for the next shares. As estimated by Daniel Taylor from the University of Pennsylvania, with whom the daily interviewed, Musk probably managed to save more than 143 million dollars in this way.

However, other investors who sold their shares between March 24 and April 4 suffered. Knowing Musk’s intentions, they could leave their shares or earn more from the deal. Due to the situation, in mid-April they decided y against the South African-born billionaire.

The US Securities and Exchange Commission also decided to act and initiated an investigation into failure to comply with disclosure obligations regarding the purchase of Twitter shares. It is worth recalling that Musk was already in trouble with SEK in 2018, when he announced (on Twitter) that he would buy all Tesla shares, and when the company’s valuation increased significantly, he gave up the idea.

Source: Gazeta

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