It appears that Elon Musk’s $44 billion Twitter (NYSE: TWTR) acquisition is not quite out of the woods just yet. According to Bloomberg, which cited individuals familiar with the matter, the US Federal Trade Commission opened a review into Musk’s takeover of Twitter Inc, to determine whether or not the Tesla CEO purchased the social media company in accordance with antitrust laws.
As per US merger laws, the FTC and the Justice Department need to be notified before such a transaction takes place, allowing a duration of at least 30 days before closing to allow for a potential investigation should antitrust concerns arise. The FTC can also make a second request for more information, ultimately delaying the closing timeline even further.
The deal has been heavily criticized by the Open Markets Institute, which argued that Musk would subsequently gain too much “direct control over one of the world’s most important platforms for public communications and debate.” The group also pointed out Musk’s satellite communication company Starlink as a potential concern.
Separately, the FTC is also examining whether or not Musk should have notified the agency’s officials about his 9% ownership in Twitter back in March. At the time, the Tesla CEO did not file FTC paperwork, instead opting to use an exemption in the law that allows one to purchase voting securities as long as they are only used for investment purposes.
Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
