To Elon Musk: there’s an app for that. It’s called Signal.
The “Technoking and Chief Executive Officer of Tesla”, who on March 14th surpassed a 5% ownership threshold in the social media platform Twitter according to his Schedule 13G filing dated April 4th, appears to have made that filing late. Musk checked the box “Rule 13d-1(c)”, which denotes “Passive Investor” eligibility and triggers a filing deadline of 10 days after surpassing 5% (in other words, a deadline of March 24th). While it remains to be seen what fine the SEC may impose upon Musk, who’s stake in Twitter currently stands at 9.2%, it has been observed that Musk may have greatly benefitted financially from his filing delay, given his continuing purchases of Twitter stock before his filing (a public disclosure which sent Twitter share prices sharply higher).
In addition, Musk’s 5%+ stake may have required filing a different filing form according to some. That’s because his “Passive Investor” eligibility has been called into question, based on his apparent negotiations for a seat on Twitter’s Board as well as public comments about Twitter’s policies. Generally under SEC rules, an active investor surpassing 5% must instead file a more comprehensive Schedule 13D form, due 10 days after exceeding the 5% threshold. Musk did file a Schedule 13D dated April 5th, stating in that filing that his written agreement to become a Twitter Board member took place on April 4th (the implication being that his status as an active investor arose on that date and not before). To learn more about 13G filers, view our previous Coffee & Regs post on the topic.
Our Signal product tracks holdings, alerts you when you reach a filing threshold and provides regulatory support. To see a demo, please click here.
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