In This Article:
(Bloomberg) -- When Elon Musk disclosed his stake in Twitter Inc., he had a choice.
Most Read from Bloomberg
-
Russia Sidesteps Sanctions to Supply Energy to Willing World
-
Ukraine Update: UN to Vote on Dropping Russia From Rights Body
Shareholders who intend to remain “passive” -- those who don’t seek to influence or change control of a company -- file a shorter form with the U.S. Securities and Exchange Commission, called a 13G. Those angling for board seats or seismic shakeups typically file a longer and more in-depth form, a 13D, within 10 days of buying their stake. The rule applies to anyone acquiring 5% or more of a public company’s stock.
Musk announced his 9.2% stake by filing the 13G. But the billionaire, 50, isn’t exactly one to stay passive. The chief executive officer of Tesla Inc. and SpaceX has called out Twitter for “failing to adhere to free speech principles” and the need to root out cryptocurrency scams that are prolific on the social media platform, which was co-founded by his friend Jack Dorsey. Musk is also among Twitter’s most watched users, with more than 80 million followers. Late Monday, he asked them -- in a Twitter poll -- if they wanted an edit button, a feature that many users of the platform have long requested.
“The idea that Elon Musk falls within a passive category is probably a stretch. He’s not the most passive guy,” said Jill Fisch, a securities law professor at the University of Pennsylvania. “One has to ask the question: Is Elon Musk really going to be happy with a stake of this size, and remaining passive?”
Twitter is particularly vulnerable to outside pressure because unlike Alphabet Inc., Meta Platforms Inc., Amazon.com Inc. and Snap Inc., the company’s founders don’t have special voting control over its future.
Fisch noted that the status of Musk’s stake could change -- technically, investors can file a 13G and then change their minds. A 13D requires more disclosure -- shareholders have to say what their plans are, and how they’re financing the purchase of the stock. Musk and Jared Birchall, the head of his family office, didn’t respond to inquiries about his intentions. The filing with the SEC shows that the date of the event that triggered the disclosure was March 14.
Matt Levine’s Money Stuff: Elon Musk Bought Some Twitter
With Twitter’s May 25 annual meeting rapidly approaching, it’s probably too late for this year if Musk is aiming to push for drastic changes. But the size of his stake means he can still wield enormous sway, if he so chooses.