The SEC has reportedly launched a probe into Tesla CEO Elon Musk’s late disclosure last month of his large stake in Twitter, according to the Wall Street Journal.
The Wall Street Journal reports that the SEC has launched an investigation into Elon Musk’s late disclosure of his large stake in Twitter last month, a delay that allowed him to purchase more stock without alerting other Twitter shareholders to his ownership.
Elon Musk shrugs (Scott Olsen/Getty)
The SEC is reportedly probing Musk’s late submission of a public form that investors must file when they purchase more than five percent of a company’s shares. The disclosure acts as an early sign to shareholders and companies that a large investor could aim to control or exert influence over a company.
Musk made his filing on April 4, well after his stake surpassed the trigger point for disclosure. Daniel Taylor, a University of Pennsylvania accounting professor, stated that Musk likely saved more than $143 million by not reporting that his trades had crossed the five percent threshold as the share price could have been higher had the market been aware of Musk’s stake in the company.
Investors who cross the threshold are required to file a form with the SEC revealing their stake within ten days. Musk’s holdings moved past the five percent threshold on March 14, which means that he should have disclosed his stake by March 24.
After March 24, Musk purchased around $513 million of stock at prices between $38.20 and $40.31 per share, making him Twitter’s largest individual shareholder with a 9.2 percent stake in the company. As Twitter’s closing price was $49.97 on April 5, the day Musk disclosed his stake, he could have saved more than $143 million according to Dr. Taylor.
Dr. Taylor discussed the situation stating: “The case is easy. It’s straightforward. But whether they’re going to pick that battle with Elon is another question.”
Read more at the Wall Street Journal here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address lucasnolan@protonmail.com
COMMENTS
Please let us know if you're having issues with commenting.