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

Elon Musk is facing a legal push to reveal the full ownership structure of X Holdings, the parent company behind 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 marks a significant step towards transparency, especially given the secretive nature of X Holdings. Musk, who bought Twitter in 2022 for $44 billion and subsequently rebranded it as X, has kept the specific details of his company’s ownership largely under wraps for unknown reasons.

The acquisition led to significant changes, including laying off about 75 per cent of the staff, and since then, questions have lingered about who exactly holds stakes in X Holdings.

This ruling stems from a lawsuit filed by a group of former Twitter employees, who are seeking payment of arbitration fees they incurred after disputes with their former employer.

They argue that the public has a right to know who is behind the scenes at X, especially given its role as a major social media platform.

Musk’s legal team tried to keep the ownership details confidential, arguing that X Holdings routinely keeps its ownership information private and considers it confidential. However, the judge wasn’t convinced by these arguments.

In the ruling, the judge noted that the disclosure statement does not contain any sensitive trade information that would require keeping it sealed. For this reason, X Holdings has been ordered to file the disclosure document in court by September 4.

This ruling is likely to shed light on the extent of involvement from high-profile investors like Jack Dorsey, the co-founder and former CEO of Twitter, who rolled over more than $1 billion worth of his Twitter shares into the company during Musk’s acquisition.

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

Silverman, who pushed for the disclosure, emphasized the importance of this information being made public. He pointed out that understanding who owns and potentially influences a platform like X is crucial for transparency and accountability, particularly in today’s digital age where such platforms play a significant role in public discourse.

In short, the court’s decision marks a step toward greater transparency regarding the ownership and control of one of the most influential social media platforms in the world.