Musk Jokes About Buying Manchester United — Will the SEC Act?

Mohit Oberoi, CFA - Author
By

Aug. 17 2022, Published 8:16 a.m. ET

Tesla CEO Elon Musk, who backed out of the deal to acquire Twitter, and is facing a lawsuit for the same, tweeted that he is buying Manchester United. However, Musk ended up saying it was a joke. Manchester United stock is trading higher on Aug. 17 even though futures point to a weak opening for broader markets.

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Like Twitter, Manchester United is also a publicly traded company. Before making an offer to acquire Twitter, Musk took over a 9 percent stake in the company and became its largest individual stockholder. As for the Manchester United deal, it came out of the blue. Musk talked about it in a reply to his tweet on his political inclinations, only to deny it within hours.

Elon Musk said buying Manchester United was a "joke."

In a short and crisp tweet, Musk said he is buying Manchester United. He didn't provide many details about the transaction. Unlike Twitter, which was a $44 billion deal and Musk had to arrange for the funding, he wouldn't have faced any such problems with Manchester United, if he was serious about the acquisition.

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Manchester United only has a market cap of around $2 billion

Manchester United only has a market cap of around $2 billion, which isn't even 1 percent of Musk’s massive net worth. Musk recently sold billions of dollars worth of Tesla stock within months of saying he wouldn't sell anymore.

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However, Musk is notorious for changing his views quickly. The most recent example is of course his flip-flop in buying Twitter. After pressuring the company’s board to accept his offer, he backed out of the deal.

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Musk has changed his positions on crypto assets.

Musk has also changed his positions on crypto assets multiple times. Tesla bought Bitcoin in 2021 and started to accept the crypto as payment for its cars. Soon, the company announced that it wouldn't accept Bitcoin as payment but Musk then said that the company wouldn't sell the Bitcoin that it held.

In the second quarter of 2022, Tesla sold most of its Bitcoin. While the company claimed it did so to raise cash amid the lockdowns in China that hurt its earnings, one has to be quite naïve to believe it as Tesla is flush with cash. Musk has had differing positions on Dogecoin also and the self-proclaimed Dogefather once called the meme crypto asset a “hustle.”

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Is Musk serious about buying Manchester United?

Musk uses Twitter for jokes and pranks. After the Twitter acquisition drama, many wonder whether he's serious about buying Manchester United. If it's just another prank from Musk, it might have repercussions like his infamous “taking Tesla private” tweet. Both Musk and Tesla paid a fine for that tweet and he also lost his position as the company’s chairman.

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Musk has had a tumultuous relationship with the SEC and often mocks the regulator as the “Short Seller Enrichment Commission.” Musk often targets short sellers on Twitter and also launched “Tesla Short Shorts” in 2020 in an apparent dig at short sellers.

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Tesla short sellers lost billions of dollars in 2020 and 2021 as the stock rose 740 percent and 50 percent, respectively. Even Michael Burry has closed his short position in Tesla. He has been warning of a market crash and sold all the holdings in the second quarter of 2022 while adding a small position in GEO Group stock.

Coming back to Musk’s "joke" about buying Machester United, while the prank was played outside of market hours, the SEC might get involved, considering the interest in the stock after Musk's prank.

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