Inside the news Elon Musk takes significant ownership stake in Twitter — and the revelation that is actually working on an edit button for tweets — many people noticed a wrinkle that seemed small at first but could cause problems later on.
On Monday, Musk filed beneficial ownership report paperwork with the Securities and Exchange Commission to note his ownership of 73,486,938 shares of Twitter (about 9.2 percent of his outstanding common stock and enough to make him the shareholder). largest individual in the company), and the box checked on the form (pdf) indicated that this was a Schedule 13G, which allows simple disclosure for investors who intend to remain “passive” in the affairs of the company.
We don’t usually get into the minutiae of the stock market, but this is important because of what happened next. This morning, Twitter and its CEO, Parag Agrawal, announced that Elon Musk will become a member of the boardand that news drew attention because it suggests a much more active role, which requires filing a more detailed Section 13D form on the purchase of shares.
Not having the correct disclosure could result in a fine from the SEC, and as much as Elon seems to enjoy his ongoing run-ins with the federal agency (claiming Broken promises, accusing the leaking agency, claiming it was forced into an unfair deal about your tweets, and quoting eminem in a court filing are just a few), it sounds like this is one you’ve decided to avoid. Around the same time, the news broke about the edit button, an updated presentation appeared, modifying the old one, ticking the right box, and seemingly avoiding an unnecessary headache for the billionaire and his new 9.2 percent toy.
Notably, the new form includes language related to Musk’s plans for his involvement with the company and the company in general. He references the agreement that he will not seek to own more than 14.9 percent of Twitter stock as a condition of joining the board and that, aside from selling or buying shares, he has no plans to seek to sell the company or its subsidiaries. propose a merger or take any other action listed under item 4 on the form. A report of The New York Times It indicates that, unlike other board members, Musk did not sign an agreement promising not to influence company policies.
The new filing also has a lot more detail than Monday’s form about how we got here. It indicates that Musk has been buying shares of Twitter almost daily since January 31. He never bought less than 371,075 shares on the days he bought them, peaking at 4,839,507 on February 7, and the last lot listed was bought on April 1. On April 4, Twitter announced its new role, and a day later we heard the news about the edit button (which, according to Twitter, has been in the works for over a year and has nothing to do with any surveys published by Twitter). your most recent board member). ).