On Monday, another SEC filing revealed that Musk had secured a 9.2% stake in Twitter, making him the largest stakeholder. However, the filing also states that as long as the Tesla CEO is serving on the board (and 90 days after that period), he can’t hold more than 14.9% of the company’s stocks.
Musk will serve as a Class II director until the company’s 2024 annual meeting of stockholders. He currently holds 73,486,938 shares out of a total of 800,641,166 Twitter shares.
“For so long as Mr. Musk is serving on the Board and for 90 days thereafter, Mr Musk will not, either alone or as a member of a group, become the beneficial owner of more than 14.9% of the Company’s common stock outstanding at such time, including for these purposes economic exposure through derivative securities, swaps, or hedging transactions,” the filing says.
With Twitter stocks soaring, things seem to be going well for Elon Musk, however, he might’ve violated SEC rules that might end up in a hefty fine.
Musk’s SEC violation and fine
As reported by CNBC, Musk’s failure to disclose the investment within 10 days of purchase (as required with stake acquisition of over 5%), might land him in hot waters with the SEC. Musk acquired the shares on March 14, 2022, and only revealed them on April 4, 2022, which might put a $100,000 hole in his pocket.
While the $100,000 fine is typical for such a violation, it won’t pinch Musk much who has butted heads with the SEC several times in the past for his tweet saying “funding secured” to take Tesla private.
Founder and former CEO Jack Dorsey, who owns 2.25% of Twitter and is a part of the board till May, hasn’t always seen eye to eye with Musk in the past but both seem to have found a common ground as both aren’t fans of Web3.
Following the announcement, Dorsey tweeted, “I’m really happy Elon is joining the Twitter board! He cares deeply about our world and Twitter’s role in it. Parag and Elon both lead with their hearts, and they will be an incredible team.”
Elon ran a poll on Monday, which was endorsed by Twitter CEO Parag Agrawal, who took over the reins of the company last November.