We’re now at that part of the Elon Musk–Twitter drama where—as happens for some long-running TV shows—the plotline has gone off the rails. Of course, this isn’t a TV show, although there likely will be one, and I nominate Jonah Hill to play Elon Musk. And what seems off the wall is just life in Musk’s world. It’s a little like the alternate reality Donald Trump creates to replace a less convenient actual reality. In Musk’s case, he is so obsessed with using the red herring of spam bots on Twitter to get out of buying the company that he had the chutzpah today to ask, “Hello @SECGov, anyone home?” If the SEC investigates anything arising out of this deal, it seems safe to say it won’t be how many spam bots are on Twitter.
In fact, as The Wall Street Journal has reported, the SEC is investigating whether Musk breached disclosure rules in how he initially reported his investment, similar to an FTC investigation we previously reported. And based on details in a lengthy securities filing by Twitter today, those investigators have a lot to delve into. Most notably, we learned that Musk contacted members of Twitter’s board to reveal he had bought more than 5% of Twitter nine days before disclosing it publicly on April 4. By the time he made that disclosure—when he categorized himself as a passive shareholder uninterested in “changing or influencing the control” of the company—he had told Twitter directors he might buy the company and had been invited to join the board! So yeah, the passive category seems…ah, not quite right.