New Delhi: Tesla Inc Chief Executive Elon Musk`s initial 9% stake purchase in Twitter Inc is being probed by the Federal Trade Commission (FTC), The Information reported on Thursday.
The FTC is looking into whether Musk complied with an antitrust reporting requirement when he bought his stake in the social media company in early April, the report said, citing people with knowledge of the situation.
Twitter did not immediately respond to a Reuters request for comment.
Musk, who on Monday reached a deal to acquire Twitter for $44 billion, was responding to a tweet by a podcast host Saagar Enjeti about Vijaya Gadde, the executive who oversees Twitter`s policy and legal teams. Also Read: Carl Pei’s Nothing introduces Nothing OS in Beta on Google Play Store
Twitter`s merger agreement with Musk stipulates that Musk can tweet about the deal while it is pending "so long as such Tweets do not disparage the Company or any of its Representatives." There was no indication that Twitter, which inked the deal with Musk after deciding his offer was attractive, would seek to cancel the sale because of his recent criticism. Also Read: In his nearly 13 years on the platform, Twitter has become an important part of Musk’s personal brand. It’s a place where he communicates to his more than 80 million followers about his business ventures, lashes out at people he views as detractors, makes market-moving commentary about crypto currencies and shares the occasional meme.
To put the relationship between Musk and Twitter in his own words, he quipped in a 2019 tweet: “Some people use their hair to express themselves, I use Twitter.”
Musk’s push to buy Twitter outright notably came after he declined a seat on the company’s board, a move some corporate governance experts speculated may have been because such a role would have come with the expectation that Musk stops tweeting criticisms about the company.
Trying to get Musk to stop tweeting about companies, however, is almost a prologue to how he ended up seeking to buy Twitter. Musk’s tweets about Tesla have landed him in hot water, multiple times, with the US Securities and Exchange Commission. His yearslong feud with the SEC dates back to his now-infamous 2018 tweet stating, “Am considering taking Tesla private at $420. Funding secured.”
The nine-word tweet sent Tesla stock surging at the time, but the SEC then accused him of misleading investors. Musk and regulators eventually reached a deal that included, among other provisions, a requirement that Musk gain pre-approval from other Tesla executives prior to tweeting about the company. Seemingly ever since, Musk has opined about what he sees as attacks on “free speech.”
The saga continued earlier this year as Tesla disclosed that it had received a subpoena from the SEC after Musk asked his Twitter followers last year if he should sell 10% of his stake in the company. In March, responding to Musk challenging the subpoena in part on first amendment rights, an SEC regulator urged a federal judge to allow his tweets to continue to be scrutinized.
A few days later, on March 26, Musk tweeted that he is giving "serious thought" to creating his own social media platform, claiming Twitter does not uphold principles of free speech. Approximately a week after that, Musk bought a more than 9% stake in Twitter and became the tech giant’s largest shareholder. Soon after, on Monday, Twitter said it had agreed to sell itself to Musk entirely.
"The Twitter Board conducted a thoughtful and comprehensive process to assess Elon's proposal with a deliberate focus on value, certainty, and financing," Twitter independent board chair Bret Taylor said in a statement announcing the deal, which he described as “the best path forward for Twitter's stockholders."
Musk, meanwhile, doubled down on his positioning himself as a champion of “free speech.”
"Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated," Musk said in a statement Monday. "Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it.”
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