Last week we learned that authorities are reportedly investigating Elon Musk’s business dealings with respect to his $44 billion purchase of Twitter.
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“The Securities and Exchange Commission is probing Mr. Musk’s tardy submission of a public form that investors must file when they buy more than 5% of a company’s shares,” According to The Wall Street Journal. “The disclosure functions as an early sign to shareholders and companies that a significant investor could seek to control or influence a company.”
“The Tesla Inc. chief executive made his filing on April 4, at least 10 days after his stake surpassed the trigger point for disclosure.
Mr. Musk hasn’t publicly explained why he didn’t file in a timely manner. Mr. Musk likely saved more than $143 million by not reporting that his trades had crossed the 5% threshold, said Daniel Taylor, a University of Pennsylvania accounting professor, since the share price could have been higher had the market known of the billionaire’s growing stake,” the Journal added.
“Investors who cross that line are required to file a form with the SEC revealing their stake within 10 days. Mr. Musk’s holdings topped 5% on March 14, securities filings show, meaning he should have disclosed his stake by March 24 under SEC rules.
After March 24, Mr. Musk purchased roughly $513 million worth of stock at prices between $38.20 and $40.31 a share, according to a regulatory filing. The total buying spree made him Twitter’s largest individual shareholder with 9.2% of its shares.
Based on Twitter’s closing price of $49.97 on April 4, the day Mr. Musk disclosed his stake, he likely saved more than $143 million on those trades, Dr. Taylor estimated,” according to the report.
“The case is easy. It’s straightforward. But whether they’re going to pick that battle with Elon is another question,” explained Dr. Taylor, implying a possible regulation lawsuit against Musk.
Well, it appears that Musk is ready for battle because this week he went after the Biden administration on the economy, hard.
According to the mega-billionaire, the United States must address inflation, or else we will end up like socialist Venezuela.
Appearing virtually on a podcast, Musk, who is buying Twitter, said the government has pumped out too much money recently.
“I mean, the obvious reason for inflation is that the government printed a zillion amount of more money than it had, obviously,” Musk said, referring to the COVID-19 stimulus packages of trillions of dollars passed in the past few years.
The inflation rate in the US rose by 8.3 percent in April from a year ago. It’s slightly below the 8.5 percent increase in March, but still close to an all-time high.
“So it’s like the government can’t … issue checks far in excess of revenue without there being inflation, you know, velocity of money held constant,” he said. “If the federal government writes checks, they never bounce. So that is effectively creation of more dollars. And if there are more dollars created, then the increase in the goods and services across the economy, then you have inflation, again, velocity of money held constant.”
If the government was able to simply “issue massive amounts of money and deficits didn’t matter, then, well, why don’t we just make the deficit 100 times bigger,” Musk questioned. “The answer is, you can’t because it will basically turn the dollar into something that is worthless.”
“Various countries have tried this experiment multiple times,” Musk pointed out. “Have you seen Venezuela? Like the poor, poor people of Venezuela are, you know, have been just run roughshod by their government.”
In Venezuela, a country with considerable oil and gas reserves, inflation in 2018 increased by more than 65,000 percent during an economic collapse accompanied by plummeting oil prices. A devaluation of the Venezuelan currency, caused by Nicolas Maduro’s regime, accelerated the increase in prices.
“So obviously you can’t simply create money,” Musk stated. He pointed out “the true economy,” meaning “the output of goods and services,” in contrast to just “money.”
Also at the conference, Musk complained that the Biden administration “doesn’t seem to get a lot done” which led to him questioning who was in charge. “The real president is whoever controls the teleprompter,” he declared. “The path to power is the path to the teleprompter.”
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“The Trump administration, leaving Trump aside, there were a lot of people in the administration who were effective at getting things done,” he reflected.
In addition to Musk, Jeff Bezos, who is also one of the richest people in the world, has increasingly targeted the White House’s economic policies. According to Bezos, the high inflation is due to the rapid increases in federal spending.
“Remember the Administration tried their best to add another $3.5 TRILLION to federal spending,” Bezos tweeted Monday, eliciting an outcry from White House officials. “They failed, but if they had succeeded, inflation would be even higher than it is today, and inflation today is at a 40-year high.”