President Biden’s Securities and Exchange Commission (SEC) announced Tuesday that it will take action against Elon Musk for allegedly underpaying him for his Twitter stock. Mr. Musk’s critics gloat that his acquisition was a gross overpayment.

The SEC enforcement action accuses Musk of violating beneficial ownership reporting requirements when he purchased $500 million worth of Twitter stock in 2022.

“Mr. Musk artificially underpriced an unsuspecting public that had not yet factored in material, non-public information regarding Mr. Musk’s beneficial ownership of more than 5% of Twitter common stock and his investment objectives. “I was able to purchase Twitter common stock.” SEC claim.

The SEC has accused him of not paying at least $150 million for the acquisition.

When Musk ultimately bought the remaining 95% of Twitter’s shares for $44 billion in October 2022, his purchase was widely condemned, with his critics ostensibly deriding it as an overpayment. did.

Analyst Dan Ives called it It claimed it was “one of the most expensive technology acquisitions in the history of M&A transactions” and valued the social media site at just $25 billion.

The media has generally provided negative coverage of the mogul, but as of November 2024, they have been deriding his signing as excessive compensation.

“Elon Musk overpaid when he acquired Twitter for $44 billion in late 2022 after unsuccessful attempts to renegotiate and reverse the deal,” Axios said. I wrote In November.

Time magazine, which named Musk its 2021 Person of the Year, mentioned Fidelity’s price cut on Twitter in a May 2023 article.

“Twitter is now worth just one-third of what Elon Musk paid for the social media platform,” the newspaper reported. I wrote.

According to the new disclosure, Fidelity reduced the value of X shares during October (these are always lagged by one month).

A year into Musk’s ownership, Fidelity has reduced its overall value by 68.12%.

— Dan Primack (@danprimack) December 2, 2023

CNN reported Citing Fidelity again, he mentioned that his investment plummeted in October 2024.

“The social media platform formerly known as Twitter is worth almost 80% less than it was two years ago when Elon Musk bought it,” the outlet wrote.

Scott Galloway, marketing professor at New York University, collided before He told Christine Amanpour in a November 2022 interview that he estimated Twitter was worth just $10 billion at the time Musk bought it. Ta.

“I think we are witnessing the liberation of individuals, not corporations.” @profgaloway Here’s what he says about Elon Musk and Twitter. “I think this is a person who has a complete lack of integrity, who has no fences around him, and whose wealth will probably be cut in half.” pic.twitter.com/L7bwd0iq5Z

— Christian Amanpour (@amanpour) November 16, 2022

At Galloway’s proposed valuation, Musk’s purchase of 5% of the company for $500 million would have been exactly what that stake was worth.

Musk and the SEC have a history of conflict. Regulators sued him in 2023 to compel him to testify in an investigation into the Twitter acquisition.

Earlier, the SEC charged him with securities fraud after he tweeted that he had “secured funding” to take Tesla private at $420 a share. This charge led to a 2018 incident. settlementwhich forced Musk to resign as Tesla chairman and pay both him and the company $20 million.

Criticism of Mr. Musk’s organization has been widespread. In December, he tweeted that they were “just another weaponized machine doing political dirty work.”

The SEC is just another weaponized agency that does political dirty work. https://t.co/5w9ajcS6bf

— Elon Musk (@elonmusk) December 12, 2024

he scoffed again called them It stands for “Short Seller Enhancement Committee,” and we joked that the “E” in SEC stands for Elon.

he was once said“I have no respect for the SEC.”

A last-ditch effort by Biden’s SEC Chairman Gary Gensler to punish Musk for securities violations could force him to pay a fine and repay a portion of the difference in valuation.

It could also serve to separate Paul Atkins, Trump’s nominee to be the next SEC chairman, from Trump and his allies.

“The new commission will have to be careful not to appear to be following orders from the president’s best friend,” said David Rosenfeld, a former SEC enforcement lawyer. said Politico.

Atkins could theoretically have the case dismissed, but Tulane University law professor Anna Lipton told Politico that this was a “very clear violation” and that the lawsuit essentially They argued that the deal depends on whether Musk submits legally required beneficial ownership documents.

“Either you submitted your application or you didn’t,” Lipton concluded.