Section 13 Filings in the news because of Elon Musk

Elon Musk achieved something notable by putting Section 13 on the front page of the business section of newspapers when he bought 9.2% of Twitter, a subject typically reserved for green-shaded securities lawyers working to make sure beneficial ownership greater than 5% is properly reported with the SEC.

It started on April 4, 2022, when Elon filed a Schedule 13G to report his ownership of 9.2 % of Twitter, Inc. Schedule 13G is a short form filing that can be used by passive investors. The next day, Twitter announced that it agreed to appoint Elon to the board of directors, along with some conditions.  Later that same day on April 5, Elon submitted a Schedule 13D which is the longer form, stating the same number of shares but with more detailed information required if an investor is not passive. 

Aside from which form to use, did he miss the deadline? It is pretty clear that he did. Once you own more than 5%, you must file within 10 days.  Elon reported that he owned more than 5% on March 14, based on Twitter's 10-K. Instead of filing by March 24, the 10 day deadline, he filed on April 4. The 10 day lag means that the public didn't know Elon held more than a 5% position.  This lag gave him an extra ten days to buy the added 4.1% before the per share price hike that occured on announcement of his holdings.