Elon Musk faces SEC questions about Twitter's stake disclosure - letter

Elon Musk faces SEC questions about Twitter's stake disclosure - letter ...

Updated at 9:40 AM EST

Elon Musk was questioned by the US Securities and Exchange Commission about the original filing of his ownership stake in Twitter (TWTR) - Get Twitter, Inc. Report, according to a letter from the agency on Friday.

The same day that Musk filed papers stated a "passive" 9.2% share in the micro-blogging website, Nicholas Panos of the Securities and Exchange Commission asked the Tesla CEO to ask for information about why the disclosure was not made within the required period.

Musk gained at least 5% of his share by March 14, dubbed the 13-G statement to the Securities and Exchange Commission.

The Tesla CEO began to exert influence within hours of Musk''s original 13-G filing, which is typically used by investors who have no stated intention of exerting influence or control of the company in which they invest.

He mailed a Twitter poll to his 80.4 million followers, urging them to express their opinion on a period of anti-aging discussion among the internet users: do you want an edit button?

Parag Agrawal, the CEO who had only recently assumed office from his departing CEO Jack Dorsey, was urged users to "vote carefully." "The consequences of this survey will be significant."

Weniger that a day after that, Musk revealed what appeared to be a greater desire to exert control, agreeing to hold a position on the Twitter board for two years, recognizing the opportunity to increase his holding to 14.9%.

Musk has said that he must address, among other things, recent public statements on Twitter regarding his intentions for the group and its internal metrics.

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Following the publication of a SEC letter to change hands at $39.65 each, Twitter shares were marked 0.35% higher in early trading. Tesla shares, however, were marked 4.15% higher at $737.11 each.

A group of Twitter shareholders filed a class-action lawsuit against Musk earlier this week, alleging that the billionaire manipulated shares in the company decreased in order to purchase shares privately after amassing a 5% share by March 14 - which presumably should have been disclosed.

According to the lawsuit, he continued to purchase stock after that date, saving himself $156 million.

Musk''s use of Twitter has hampered the SEC in the past, particularly in 2018, when the company accused him of securities fraud related to a Tweet that he''d "secured" for the sale of the Tesla.

Musk claims that the evidence was true, but agreed to pay two $20 million fines, and have his tweets reviewed, in order to counteract the SEC''s objections.

In the following year, he admitted (again) that Tesla would produce around 500,000 automobiles in 2019, but later reversed on the remarks, but the stock plummeted rapidly in response.

Another Musk tweet, this time in the fall of last year, sent Tesla shares in the other direction after asking his Twitter followers if he should sell "10% of my Tesla stock" in order to create a tax liability.

In a ten-K filing, Tesla told investors that the Securities and Exchange Commission had "issued a subpoena to us looking for information on our governance decisions about compliance."

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