Events surrounding the purchase of Twitter are growing ever-more complicated, and it seems like by the end of this adventure, neither Tesla CEO Elon Musk nor the Twitter board will walk away unscathed.
The Securities and Exchange Commission revealed Friday that it has long been investigating whether Musk had properly relayed his intentions with Twitter. The agency’s regulatory filings included a letter sent to Musk April 4 that asked for clarification on multiple discrepancies found in Musk’s original shares purchases. The letter stated that Musk failed to disclose his stake at the correct time.
More than that, the agency is questioning whether Musk was right to purchase the stock as a mere passive investor if he was originally planning to buy out the company. The letter points out the world’s richest billionaire had been constantly tweeting about whether Twitter adhered to his own definition of “free speech” in the time before he announced his original stock purchase.
Mind you, this latest reveal comes just a few weeks after it came to light the SEC was probing Musk for improper timing of his original Twitter shares purchases. The agency mandates that those purchasing more than 5% of a company stock disclose that information within 10 days. Musk bought up 9.2% of the company over the course of March, but didn’t report he had crossed the 5% threshold until April 4.
This letter came to Musk only 10 days before Musk blew the doors off at Twitter headquarters with his $US44 ($61) billion proposal to buy the company at $US54.20 ($75) a share. So far, neither the SEC nor Musk have talked about this ongoing dispute on the record. The SpaceX CEO is no friend to the SEC, and he has previously been taken to task over the improper way he announced his plans to take Tesla private in 2018. $US40 ($56) million later, Musk was required to put any tweets dealing with buying stock past a lawyer before posting.
At the same time, there has been even more shakeup on Twitter’s board. Board members originally blocked fellow member and Musk ally Egon Durban’s reelection to the board on Wednesday. But after Durban put forward a letter of resignation, the board decided to reject his request to step down, according to Reuters.
What the hell’s going on here? Well board members complained Durban had too many commitments to other boards, six in total. Now Durban has promised to go from six board seats to a measly five by May 25 of next year. As the co-CEO of venture capital firm Silver Lake Partners, Durban had originally partnered with Musk to take Tesla private, according to a separate Reuters piece. He was also instrumental in putting together Musk’s Twitter purchase, according to the original purchase filings.
So it seems more of the board seem to be at the very best lukewarm about Musk’s allies in their inner circle. At this same board meeting Wednesday, Jack Dorsey, original Twitter CEO and Musk ally, finally announced he was leaving the board. It also came after former Twitter board member Jason Goldman claimed to Bloomberg Dorsey had “backstabbed” his fellow board members by encouraging Musk to buy the company before any of the other members heard the Tesla CEO’s intentions.
On Wednesday, Musk secured $US6.25 ($9) more in financing and also pledged $US6.8 ($9) billion more of his own funds to buy the company. Yet some analysts suspect Musk is getting cold feet. He has complained that Twitter hasn’t given him all the information about the bot situation on the platform, and said his deal was “on hold,” even though that’s not really how that works. His Tesla shares, which he would need to use to make the final purchase, have dropped in value. Still, Twitter is holding Musk to his promise, and Twitter shareholders announced Friday they were suing the Tesla CEO to make sure the promised deal stays on course.