Executive Insights

US regulators are asking Elon Musk to explain the delay in disclosing his stake in Twitter

Business Insider US
Elon Musk attends The 2022 Met Gala Celebrating "In America: An Anthology of Fashion" at The Metropolitan Museum of Art on May 02, 2022 in New York City. (Photo by Dimitrios Kambouris/Getty Images for The Met Museum/Vogue)
Elon Musk attends The 2022 Met Gala Celebrating "In America: An Anthology of Fashion" at The Metropolitan Museum of Art on May 02, 2022 in New York City. (Photo by Dimitrios Kambouris/Getty Images for The Met Museum/Vogue)
  • The US Securities and Exchange Commission published its letter to Elon Musk asking why he was late disclosing his 9.2% stake in Twitter.
  • Musk was supposed to disclose his purchase 10 days after his stake exceeded 5%. 
  • Musk sent tweets including a poll on Twitter's free speech principles during that time.
  • For more stories, go to www.BusinessInsider.co.za.

The US Securities and Exchange Commission confirmed it has asked Elon Musk about the delay in disclosing his purchase of a stake in Twitter. 

In a letter dated April 4 but only published by the SEC on Friday, Musk is asked a series of questions about his stake in the social media platform that he has offered to buy for $44 billion. 

Musk revealed a 9.2% stake in Twitter on April 4, the same day the letter was sent by the SEC, sending the company's share price soaring. 

He joined the board a day later, before reversing that decision ahead of his $54.20 a share bid for Twitter that was accepted by the board

The regulator highlighted Musk's "13G" schedule from his initial filing to state he had purchased more than 73 million shares on March 14. He was required to disclose his filing 10 days after the purchase, which would have been March 24.

"Please advise us why the Schedule 13G does not appear to have been made within the required 10 days from the date of acquisition as required by Rule 13d-1(c), the rule upon which you represented that you relied to make the submission," the letter stated, referring to a box ticked by Musk in his disclosure. 


A 13G filing needs to be made when a shareholder's stake exceeds 5%. Musk did not tick the box in his original filing to state that a 5% holding had been exceeded on March 14.

Musk made a number of comments in the aftermath of his purchase but before it was publicly disclosed, including running a poll asking users about their perception of Twitter's approach to free speech on March 25, which the SEC highlighted. 

The SEC wrote: "Your response should address, among other things, your recent public statements on the Twitter platform regarding Twitter (the issuer), including statements questioning whether Twitter (the issuer) 'rigorously adheres to' 'free speech principles'." 

Musk is facing more pressure over his offer for Twitter, with one shareholders suing the Tesla and SpaceX CEO for market manipulation following weeks of public criticism of the company and putting the deal "on hold" pending confirmation on the number of fake accounts on the platform.

Experts told Insider that Musk may be trying to lower the price to as little as $23 billion, or walk away entirely. 

The SEC didn't immediately respond to a request for comment.

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