Technology

Elon Musk raises over $7 billion to fund Twitter takeover

Elon Musk told the SEC that he continues to seek other sources of funding from Twitter shareholders. (Photo: 123RF)

SAN FRANCISCO — Elon Musk said he has received $7.14 billion to fund the takeover of Twitter, with investors including Oracle co-founder Larry Ellison and Saudi prince and businessman Al-Waleed bin Talal.

A document sent on Wednesday to the US stock market cop, the SEC, the boss of Tesla and SpaceX, names a total of 19 investors who have agreed to contribute to the acquisition of the social network.

Multibillionaire Larry Ellison, who co-founded computer giant Oracle and sits on Tesla’s board of directors, will donate US$1 billion.

Investment funds Sequoia Capital ($800M) and Vy Capital ($700M) and cryptocurrency exchange Binance ($500M) are also among the top contributors.

Prince bin Talal, for his part, will lend about 35 million of his shares to Twitter after the takeover is completed to maintain a stake in the company, which Musk wants to delist from the New York Stock Exchange.

That equates to roughly $1.9 billion at a suggested purchase price of $54.20 per share by Tesla’s boss.

The Saudi investor initially considered Musk’s offer too low compared to Twitter’s “intrinsic value.”

“Nice to contact you my ‘new’ friend @elonmusk,” Prince bin Talal tweeted on Thursday in response to a message from the Tesla boss in mid-April. “I think you will be a great leader for Twitter to promote and make the most of its huge potential,” he added.

These financial contributions will enable the South African-born entrepreneur and the world’s richest man to cut his margin loan with Morgan Stanley and other financial institutions from $12.5 billion to $6.25 billion.

A margin loan allows a borrower to increase their credit by pledging assets as collateral. In Mr. Musk’s case, it’s his Tesla shares.

At the same time, the share of the acquisition of Twitter, financed by Mr. Musk and cash, will grow to 27.25 billion US dollars from 21 billion before.

Mr. Musk also told the SEC that he continues to seek other sources of funding from Twitter shareholders, including platform founder and former boss Jack Dorsey.

For Dan Ives and John Katsingris of Wedbush Securities, this new development is “a prudent and strategic financial decision on the part of Mr. Musk that will be well received at all levels and shows that the Twitter takeover is on track to be achieved.” operate until the end of the year.

Elon Musk will serve as acting CEO of Twitter for several months after the deal closes, according to a CNBC report.

If this scenario materializes, he will replace Parag Agrawal, who has been in charge since November and succeeded Jack Dorsey after the latter’s departure.

When asked by AFP, Twitter declined to confirm this information. Tesla, for its part, did not respond to AFP inquiries.

On Wall Street, Twitter shares rose 3.8% in early trading to $50.91 but remained below Elon Musk’s $54.20 offer.

.

Back to top button