According to a new regulatory filing on Thursday, the Securities and Exchange Commission has requested billionaire Elon Musk for further information about a tweet about his recent attempt to cancel his $44 billion purchase of Twitter. The evidence reveals how Musk misrepresented his dedication to the business to the SEC while simultaneously searching Twitter for clues about spam accounts there.
It also demonstrates how the agreement can once again put Musk in the agency’s sights. The SEC’s Office of Mergers and Acquisitions submitted queries, and Musk’s attorney and Skadden partner Mike Ringler answered in a letter dated June 7 in response. In the letter, Musk answers the SEC’s request for clarity, including if a previous filing has to be changed in light of his statement that the Twitter acquisition “cannot go ahead” unless the business discloses more details about its spam accounts.
The SEC said in the filing that the word “cannot” implies that Elon Musk and his affiliates are exercising legal power under the terms of the merger agreement to postpone completing the purchase of Twitter or otherwise do not plan to finish the transaction. There are still some discrepancies in the information that was originally provided under Item 4 of Schedule 13D, which has not been updated.
Musk didn’t think his tweet “triggered any needed update to his previously filed Schedule 13D,” Ringler said at the time. At this point, Mr. Musk’s ideas and proposals for the proposed deal had not materially changed, notwithstanding his desire to gather information to assess the potential spam and phony accounts.
Since then, Musk has tried to back out of the agreement, alleging that Twitter breached the agreement by neglecting to share information it should have and by initiating layoffs without his consent.
Twitter, meanwhile, has said that it has followed the terms of the agreement and that Musk is just attempting to withdraw at this time due to altered market circumstances. In an effort to hold Musk to the original agreement, Twitter filed a lawsuit against him in Delaware Chancery Court on Tuesday.