From the outset, Musk had treated both his Twitter contract and securities law like a coloring book. His initial disclosure of Twitter share-buying missed a Securities and Exchange Commission deadline, likely saving him well north of $100 million on his early purchases. When he told the world he was gobbling up Twitter stock, he did so in paperwork that said he would be a passive, not active, investor. There are at least one and probably two securities law breaches here. The SEC can try to make Musk pay a lot of that money back. He might even do it! But probably not until after protracted legal jostling and public trolling, two of his favorite things when it comes to that particular agency. “Elon does what he does,” University at Buffalo accounting and law professor Michael Dambra told me after Musk handed the SEC these actions on a platter. “I think he does like to troll the SEC, and historically the punishments for these delayed filings are small. And compared to someone with massive wealth, such as Elon, maybe that wasn’t a big interest in his mind to make sure that he got his paperwork done.”
Musk’s purchase contract says that he may not “disparage the Company or any of its Representatives,” but he’s done that numerous times since signing the deal. He used Twitter to reply to Agrawal’s spam thread with a poop emoji and to invite harassment of at least one Twitter executive, in addition to everything else he’s said about the company he is still under contract to buy. Could Twitter try to blow up the deal because Musk used its nondisparagement clause as bath tissue? Sure. But Twitter doesn’t want that. Its board is made up of shareholders who want the deal to happen so that they and others can collect a premium. Musk is a soccer player trying to kick the ball into his own net, and Twitter is trying to stop him.
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