According to an SEC filing Thursday, Musk has secured $7.14 billion in new financing commitments for the Twitter bid, including $1 billion from Larry Ellison. Ellison, co-founder and CTO of software giant Oracle, sits on the board of Tesla, which Musk heads as CEO.
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In addition, under an agreement with Musk, Prince al-Waleed bin Talal of Saudi Arabia committed to retain the equity he owns in Twitter — his 35 million shares are worth $1.9 billion at Musk’s buyout offer — instead of receiving a cash payout, per the filing.
Musk “will continue to have discussions with certain existing holders” of Twitter stock, including ex-CEO Jack Dorsey, to contribute their shares toward his bid, according to the filing. Dorsey owns about 18 million shares of Twitter, representing 2.4% of outstanding shares (worth $975 million at Musk’s proposed price).
Musk’s latest funding also includes $800 million from venture-capital firm Sequoia Capital; $500 million from cryptocurrency exchange Binance.com; and $400 million from a16z, the VC firm founded by Marc Andreessen and Ben Horowitz.
In a Twitter thread, Horowitz said a16z threw in with Musk’s bid “because we believe in” Twitter co-founders Evan Williams and Jack Dorsey’s “vision to connect the world and we believe in Elon’s brilliance to finally make it what it was meant to be.”
Horowitz added, “While Twitter has great promise as a public square, it suffers from a myriad of difficult issues ranging from bots to abuse to censorship. Being a public company solely reliant on an advertising business model exacerbates all of these.” To that, Dorsey replied, “this is true. it needs cover for a while.”
Musk expects to take over as interim CEO once the deal closes, taking over for current chief Parag Agrawal, CNBC reported. He has already picked out a permanent CEO for Twitter, per a Reuters report last week.
Last week, Musk disclosed sales of Tesla stock worth more than $8.4 billion, which was presumably also part of amassing funds for the Twitter deal. Twitter’s board accepted Musk’s $54.20/share acquisition proposal on April 25. The deal is pending regulatory and shareholder approvals, which analysts don’t see as stumbling blocks.
According to Musk’s May 5 filing, with the new financing commitments, he has reduced the $12.5 billion margin loans he had lined up for the Twitter takeover by half, to $6.25 billion. The deal now comprises $27.25 billion in equity financing (up from $21 billion previously) and $6.25 billion in margin loans, with the remainder coming from debt financing.
Musk, the world’s richest person, has gained millions of Twitter followers since he revealed his 9.2% stock holdings April 4. He currently has nearly 91 million, up from about 80 million at the beginning of April.
Musk has claimed he’s mainly interested in protecting “free speech” on Twitter, and he has criticized the company for allegedly having a left-leaning political bias. He’s also spitballed a bevy of ideas for changes he wants to make at Twitter, including open-sourcing its algorithms for greater transparency; authenticating all users; shifting its business model toward subscriptions; and potentially charging companies and governments to use Twitter.
Twitter on Wednesday hosted its 2022 NewFronts presentation for marketers in New York, where it announced content deals including a pact with Fox Sports for exclusive World Cup programming. Twitter execs largely avoided the elephant in the room. The only reference to their potential new owner came from VP of global client solutions JP Maheu, who deadpanned, “It has been a quiet month at Twitter.”
Twitter shares rose 4% in early trading Thursday, to between about $51/share — still under Musk’s $54.20/share offer, indicating investor skepticism that the buyout will be consummated.
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