Elon Musk who has taken part in Twitter has already
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Elon Musk, who has taken part in Twitter, has already initiated a vote on reforming the functionality of the social network

Shareholders willing to remain “passive”—that is, not intending to take control of the company or take any action—under US law can purchase assets using a simplified Form 13G for the US Securities and Exchange Commission ( SEC) fill in . That’s exactly what Elon Musk did when he bought a stake in Twitter. However, he became actively involved in the affairs of the company almost immediately.

    Image source: Tesla.com

Image source: Tesla.com

It is well known that stock buyers who intend to serve on the board of directors or to become actively involved in the life of the company usually fill out the more complete Form 13D. This applies to anyone who acquires more than 5% of the shares. It is known that Elon Musk announced the purchase of a 9.2% stake while filling out a simplified Form 13G. The multi-billionaire became the company’s largest shareholder, and the fact of the transaction has already affected the company’s value – it immediately rose by almost 26-28%.

Musk has repeatedly criticized Twitter for a lack of freedom of expression and has spoken out about the need to remove cryptocurrency scammers from the site. He is not only a major shareholder, but also one of the most popular authors with around 80 million followers. By the end of Monday, Musk had begun to indirectly interfere in company affairs by organizing a poll to see if the social network needed an edit button. It is known that many have long dreamed of such an opportunity. Earlier, Musk conducted a poll that found the majority of respondents believed that Twitter violated the principle of free speech.

    Image source: twitter.com/elonmusk

Image source: twitter.com/elonmusk

That a “passive” Form 13G was filed actually means little — shareholders can later file a Form 13D, specifically designed to disclose their plans for the company in more detail.

According to legal experts, Musk doesn’t need to join the board – he’s extremely influential himself, and the “passive” application gives the businessman a great deal of flexibility, as the rest can only guess what his true intentions are – in this case, there’s no need to break the law to disclose. Some believe Musk will promote “change, not control.”

At the same time, the SEC, with which Musk already has a rather complicated relationship, could fine him for delaying disclosure of information about the purchase. The transaction is dated March 14, after which the buyer had 10 days to report it. But even though it’s been more than 20 days since the purchase, the penalty for such delays is around $100,000 — a tiny amount for a billionaire.

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About the author

Robbie Elmers

Robbie Elmers is a staff writer for Tech News Space, covering software, applications and services.

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