Musk Met Twitter Board Starting March... Continues to Demand Explanation on Fake Bots

Elon Musk, CEO of Tesla
[Photo by Reuters]

[Asia Economy Reporter Jeong Hyunjin] It has been confirmed belatedly that Elon Musk, CEO of Tesla, has been discussing the possibility of acquiring Twitter with the social networking service’s (SNS) board of directors since March. This indicates that contact with Twitter’s board occurred even before he disclosed in early last month that he held a 9% stake in Twitter, which is expected to become another factor in the ongoing antitrust filing violation investigation.

According to major foreign media on the 17th (local time), Twitter revealed in a filing with the U.S. Securities and Exchange Commission (SEC) that on March 27, Musk spoke with the board and said he was "considering several options, including joining Twitter’s board, taking Twitter private, and launching a competing platform against Twitter." Although there was no specific mention of an acquisition, it is interpreted that the possibilities he mentioned included elements pointing toward an acquisition.

Previously, after it was disclosed on the 4th of last month that Musk had become a major shareholder of Twitter, he stated that he was merely a passive investor and had no plans or intentions to acquire Twitter. However, just one day later, he changed his stance to become an active investor but again repeated that he "currently has no plans" regarding an acquisition. On the 9th of the same month, Twitter announced that Musk requested to take the company private while declining to join the board.

This differs somewhat from the tone of the disclosure Musk made on the 11th of last month. According to documents released by Twitter, Musk had clearly made demands before his disclosure, but in the disclosure at that time, he only mentioned the possibility of "occasional discussions with Twitter’s board and management about potential business combinations and strategic alternatives," and the official announcement of a hostile takeover attempt was made on April 14.

Foreign media reported that the materials Twitter disclosed that day raise new questions regarding Musk’s compliance with Twitter’s share acquisition reporting regulations. Musk acquired 73.5 million shares (a 9.2% stake) of Twitter on March 14 but only disclosed this about two weeks later on the 4th of last month. Afterward, he vacillated between stating he was a passive investor and then an active investor in amended disclosures. The U.S. Federal Trade Commission (FTC) is currently investigating this matter.

Meanwhile, Musk announced on the 13th that he would temporarily suspend the Twitter acquisition, citing the high proportion of spam and fake accounts on Twitter, continuing the controversy. On the same day, Musk created an unofficial poll on his Twitter account, posting, "Twitter claims that over 95% of daily active users are real people. Has anyone experienced this?" When a follower suggested requesting an investigation by the SEC, Musk responded, "Hello, SEC. Is anyone there?"