Musk’s Tweets Drew More SEC Scrutiny as He Soured on Twitter Bid

Elon Musk’s tweets are under the microscope with regulators again, this time over a missive in May that cast doubt on whether he’d go through with his $44 billion takeover bid for Twitter Inc.

The billionaire drew scrutiny from the US Securities and Exchange Commission over a May 17 tweet that said the “deal cannot move forward,” according to correspondence posted publicly on Thursday. In a June 2 letter, the agency asked why that statement wasn’t a “material” change that should have been disclosed to investors in a formal amendment to his previous SEC filing. Musk’s lawyers responded that he didn’t see the need.

Elon Musk

Photographer: ANGELA WEISS/AFP

“Mr. Musk does not believe, however, that the May 17, 2022 social media posts regarding spam and fake accounts on Twitter Inc.’s platform triggered any required amendment,” wrote Mike Ringler, an attorney with Skadden, Arps, Slate, Meagher & Flom, in a June 7 letter. “Despite Mr. Musk’s desire to obtain information to evaluate the potential spam and fake accounts, there was no material change to Mr. Musk’s plans and proposals regarding the proposed transaction at such time.”

Musk backed away from the Twitter purchase last week, spurring a lawsuit from the company to make him complete the deal. In the days leading up to the tweet in question from the SEC, the world’s richest person also said on the social media platform that the deal was “temporarily on hold.”

Read more: Twitter Hits Back at Musk, Suing to Force $44 Billion Buyout

The exchange is a sign that the SEC has continued asking questions about Musk’s online statements that touch on his business dealings with public companies. The agency began probing Musk’s regulatory filings about Twitter in early April after he filed the wrong form and missed a deadline to disclose his majority stake in the social media company.

It’s not Musk’s first run-in with Wall Street’s main watchdog over his social media musings. He dubbed the regulator the “Shortseller Enrichment Commission” just after settling securities fraud charges in 2018 related to tweets about taking private his electric car company, Tesla Inc.

That settlement included appointing a “Twitter sitter” to approve Musk’s Tesla-related tweets. The South Africa-born tech founder in June appealed a court ruling that thwarted his effort to ditch his social media minder.

Read more: Elon Musk Appeals Ruling Upholding His ‘Twitter Sitter’ Deal

The latest correspondence encapsulates some of the SEC’s own struggles in getting a response out of Musk and his lawyers related to his Twitter deal comments.

The agency’s staff noted they didn’t hear from Musk’s counsel for more than two weeks after initially trying to get in touch by telephone, prompting the SEC letter. The regulators said they might decide to release publicly all of the correspondence, “including this letter, relating to the review of your filing.”

Musk’s attorneys didn’t immediately respond to requests for comment.

To contact the reporters on this story:
Lydia Beyoud in Washington at lbeyoud2@bloomberg.net;
Tina Davis in New York at tinadavis@bloomberg.net

To contact the editors responsible for this story:
Rick Green at rgreen18@bloomberg.net

Brian Chappatta

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