US judge to force Elon Musk to disclose X's complete ownership structure

Aug. 22, 2024, 8:23 a.m.

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Elon Musk is facing a legal demand to reveal the full ownership structure of X Holdings, the parent company of the X platform (formerly Twitter) and his AI startup, xAI.

This move comes after a federal judge in California ruled on Tuesday that a detailed corporate disclosure statement from X Holdings must be unsealed, which will make public the complete list of stakeholders in Musk’s companies.

The decision represents a significant step toward transparency, especially considering the secretive nature of X Holdings. Musk, who acquired Twitter in 2022 for $44 billion and later renamed it as X, has kept the specific details of his company's ownership largely hidden for unknown reasons.

Advertisement The acquisition resulted in major changes, including the dismissal of about 75 per cent of the workforce, and since then, questions have persisted about who exactly holds stakes in X Holdings.

This ruling originates from a lawsuit filed by a group of former Twitter employees, who are seeking compensation for arbitration fees they incurred following disputes with their ex-employer.

Advocates for transparency argue that the public deserves to know who is behind the scenes at X, especially given its significant influence as a social media platform.

Musk’s legal team attempted to keep the ownership details private, arguing that X Holdings routinely protects its ownership information and considers it confidential. However, the judge rejected these arguments.

In the ruling, the judge acknowledged that the disclosure statement does not contain any sensitive business information that would justify keeping it confidential. As a result, X Holdings has been instructed to submit the disclosure document to the court by September 4.

This decision is expected to reveal the extent of involvement from prominent investors such as Jack Dorsey, the co-founder and former CEO of Twitter, who converted over $1 billion worth of his Twitter shares into the company during Musk’s acquisition.

Other notable investors include Oracle co-founder Larry Ellison and prominent venture capital firms like Andreessen Horowitz and Sequoia Capital. However, the complete breakdown of all investors and the overall company structure has remained undisclosed — until now.

Advertisement Silverman, who championed the disclosure, highlighted the importance of this information being made public. He emphasized that understanding who owns and potentially influences a platform like X is crucial for transparency and accountability, especially in today’s digital age where these platforms play a vital role in public discussions.

Essentially, the court's ruling represents a move towards increased openness about the ownership and control of one of the world's most influential social media platforms.