Tags:
Journalism of Courage
Elon Musk is dropping plans to partially fund his purchase of Twitter Inc with a margin loan tied to his Tesla Inc stake and increasing the size of the deal’s equity component to $33.5 billion.
Musk will provide an additional $6.25 billion in equity financing for the $44 billion buyout, according to a regulatory filing Wednesday. That’s enough to eliminate the margin loan of the same size, which had already been reduced earlier this month.
Musk, Tesla’s co-founder, is still on the hook for coming up with the full $33.5 billion equity component. But he can turn to others for help.
Musk is seeking additional financing commitments, including having discussions with Twitter co-founder Jack Dorsey and other investors about rolling their equity into the private company, according to the latest filing. He already announced earlier this month that he secured $7.1 billion of equity commitments from investors including billionaire Larry Ellison, Sequoia Capital and Binance.
Bloomberg reported earlier this month that Musk had received commitments for another $1 billion in equity since that initial round, and his advisers were soliciting interest from potential investors for as much as $6 billion in preferred equity financing.
Musk, 50, is the world’s richest person, with a personal fortune of $200 billion, according to the Bloomberg Billionaires Index. That’s largely due to his stake in Tesla.
Musk already disposed of $8.5 billion of Tesla shares to help raise cash for his Twitter deal, tweeting at the time that he had no further sales planned.
Twitter closed Wednesday at $37.16, well below Musk’s offering price of $54.20. The shares were up 6.8% in after-hours trading at 4:58 p.m. in New York, while Tesla slid 1.4%.
