The purchase of an initial 9% stake in Twitter Inc. by Tesla Inc. Chief Executive Elon Musk is under investigation by the Federal Trade Commission (FTC). The Information reported Thursday.
The FTC is investigating whether Musk complied with an antitrust disclosure requirement when he bought his stake in the social media platform in early April, the report said, citing people with knowledge of the situation.
Companies that fail to comply with the rules on reporting significant stock purchases or other acquisitions can be fined up to $43,792 per day.
Following the initial share purchase, Musk, the world’s richest man, offered to acquire the company for $54.20 per share in cash, which Twitter agreed to earlier this week.
There is little expectation that Musk’s possible purchase of Twitter will be rejected by antitrust authorities.
The focus of the FTC investigation is whether Musk bought the stake to influence Twitter’s management or sought to be a passive shareholder, according to the report.
In his April 4 statement to the US Securities and Exchange Commission, Musk called his stake passive.
Twitter indicated that it has no comment to make on the report, while the FTC similarly declined to comment.