Elon Musk’s Fake Bid to Purchase Manchester United Could Be an SEC Violation
Win McNamee/Getty Images. Pictured: Elon Musk
Elon Musk must like giving money away.
It was not so long ago that he was fined $20 million by the Securities and Exchange Commission (SEC) for tweeting that he had “funding secured” to take Tesla private for $420 a share — a weed reference.
The funding hadn’t been secured, but Tesla’s stock price skyrocketed as a result of his tweet.
The SEC cracked down on the securities fraud case, ruling that Musk can’t be the chairman of his own company anymore and that his tweets need to be pre-approved by Tesla lawyers.
Fast forward to Tuesday night, and it appears the mercurial businessman has yet to learn his lesson.
Also, I’m buying Manchester United ur welcome
— Elon Musk (@elonmusk) August 17, 2022
Four hours later, at 12:30 a.m. ET on Wednesday morning, Musk refuted the claim that he was serious about the bid, claiming it was a “long-running joke.”
Manchester United is a publicly traded company. If Musk threatens to buy any company — literally any random business — the value of it will rise in the eyes of his thousands of disciples, or just from basic speculators looking to get in on the profit.
Remember Dogecoin? Musk sparked several 10%+ rallies in the coin, which many regard as worthless, throughout 2021.
Same goes for two assets — Bitcoin and Twitter — that have a bit more intrinsic value, but whose prices were similarly goosed up as a result of Musk’s tweets.
In those situations, Musk was careful not to outright pump the value of the asset.
He simply made weird memes and oddball tweets about supporting Dogecoin and Bitcoin. The news he was buying Twitter was broken by third-party media outlets.
That’s different than the situation on Tuesday night, when he outright said he would purchase Manchester United without elaborating further.
Naturally, Manchester United’s stock rose on the speculation, opening as high as 8% on the backs of Musk’s fake bid, its highest price in more than three months.
It doesn’t help that United are mired in absolute chaos. The team has lost its first two games to mid-table squads and the owners — the Glazer family, which also own the Tampa Bay Buccaneers — have faced criticism over the club’s consistent mismanagement and underperformance.
Any savior that can pull the club out of its misery and return it to its previous glory would have fans, players and staff more than happy — and represent a rosier financial future.
So, the stock price increased in conjunction, even when Musk’s salvo ended up being a false alarm.
The lesson: It’s one thing for people to tweet things into an ether. But if you are the richest man in the world, what you tweet has serious ramifications.
The ManU tweet, on a four-hour delay, is wading in dirty waters. If you or I said what he said Tuesday night, we wouldn’t be fined by the SEC. But Musk? He can buy anything — and the markets move to his whim.
And it’s not like Musk doesn’t know any better. We know he loves doing this. He has a track record.
When you are the richest man in the world, saying you are going to buy something, especially something that is public, isn’t a joke.
It’s borderline fraud.