The Securities and Exchange Commission served Tesla CEO Elon Musk with a letter on Thursday to request more information related to a tweet on his $44 billion acquisition of Twitter. Musk has in recent weeks moved to withdraw from the proposal.
In a regulatory filing on Thursday, the SEC asked for additional information about his disclosures regarding the Twitter deal. According to the agency’s letter from June 2, Musk did not update his public filings when he tweeted that the “deal cannot move forward” on May 17.
Five days after the SEC’s initial letter, Musk’s lawyers from the white-shoe law firm Skadden Arps responded to the SEC by asserting that Musk was simply exercising his rights under the merger deal he struck with Twitter by openly threatening to walk away from it in his tweet.
“The term ‘cannot’ suggests that Mr. Musk and his affiliates are exercising a legal right under the terms of the merger agreement to suspend completion of the acquisition of Twitter or otherwise do not intend to complete the acquisition,” said Skadden lawyer Mike Ringler in a response to the SEC.
Last week, Musk announced that he planned to withdraw from the takeover bid over what he insists is Twitter’s refusal to share complete data on the number of bots on its platform. Twitter has sued Musk to complete the purchase, setting the stage for a heavyweight legal battle.
The SEC’s letter also adds to the agency’s own scrutiny of Musk’s takeover bid since it began in May. Last month, it questioned why Musk failed to disclose his stake in Twitter when it went over the 5% threshold that made it a legal requirement to inform regulators. Musk reportedly only informed the SEC of his purchase after he acquired about 9% of Twitter’s stock.