Wednesday, May 25, 2022

US Govt opens investigations into Elon Musk’s business dealings

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Photoshop: Elon Musk and Twitter logo

A week after the billionaire businessman expressed fears over his life, the US Federal Government has opened investigations business dealings surrounding his recent $44 billion purchase of Twitter.

“The Securities and Exchange Commission is probing Mr. Musk’s tardy submission of a public form that investors must file when they buy more than 5% of a company’s shares,” The Wall Street Journal reported. “The disclosure functions as an early sign to shareholders and companies that a significant investor could seek to control or influence a company.”

The report said that Musk’s April 4 disclosure filing was at least 10 days late, a move that is believed to have saved him more than $140 million because share prices could have been higher if the public knew about his ownership of 5% of the company.

“The case is easy. It’s straightforward,” Daniel Taylor, a University of Pennsylvania accounting professor, said. “But whether they’re going to pick that battle with Elon is another question.”

The report noted that a lawsuit against Musk from the SEC would likely not stop him from taking over Twitter since the company’s board of director’s unanimously approved to be acquired by Musk and the SEC may lack the power to do so. Musk’s purchase of Twitter is also reportedly being reviewed by the Federal Trade Commission (FTC).

Musk said this week that he will reverse Twitter’s permanent ban on former President Donald Trump if and when the sale is finalized.

“I think that was a mistake because it alienated a large part of the county, and did not ultimately result in Donald Trump not having a voice,” Musk said, adding that the decision was “morally bad.”

“That doesn’t mean that someone gets to say whatever they want to say,” Musk said. “If they say something that is illegal or destructive to the world, then there should be perhaps a timeout, temporary suspension or that particular tweet should be made invisible or have very little traction.”

Musk said this week that he will reverse Twitter’s permanent ban on former President Donald Trump if and when the sale is finalized.

“I think that was a mistake because it alienated a large part of the county, and did not ultimately result in Donald Trump not having a voice,” Musk said, adding that the decision was “morally bad.”

“That doesn’t mean that someone gets to say whatever they want to say,” Musk said. “If they say something that is illegal or destructive to the world, then there should be perhaps a timeout, temporary suspension or that particular tweet should be made invisible or have very little traction.”

Elon Musk told banks backing his proposed $44 billion Twitter takeover that he has a new CEO lined up for the social network, Reuters reported Friday, but it’s still unclear who it’ll be. Parag Agrawal, who took over from co-founder Jack Dorsey in November, will apparently stay until the sale is completed.

The Tesla boss also said he’d reign in executive and board pay, in addition to figuring out new ways to monetize tweets, according to Reuters, which cited anonymous sources.

Twitter accepted Musk’s offer to buy Twitter for $54.20 per share, but the deal still requires shareholder and regulatory approval. Musk sold around $8.5 billion worth of Tesla stock in the days since the deal, according to Securities and Exchange Commission filings, as earlier reported by CNBC and the The Wall Street Journal.

During his calls with the banks, Musk also highlighted the need for influencers and celebrities to be more active on Twitter, Bloomberg reported. In a tweet in early April, he noted that many of the top accounts rarely post. Musician Taylor Swift has more than 90 million followers, for example, but hasn’t tweeted since January.

Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to editor@kenyanbusinessfeed.com

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