The multi-billion-dollar acquisition of Twitter has been a big deal over the past weeks, especially as speculations were ripe about Musk backing out of the deal or looking to acquire the popular micro-blogging site at a lower price (something Musk had earlier said was not “out of the question”).
Only last week, the Tesla CEO announced that he was putting the deal on hold until Twitter provided proof that spam and fake accounts indeed represented less than 5% of users, which the company claimed.
Now, it seems that the billionaire has not completely abandoned his plans and is looking to go through with the deal once again as he secured additional funding to make the $44 billion purchase. A new SEC filing shows the revised financing plan for the acquisition, which includes the commitment of an additional $6.25 billion in equity financing. This comes on the same day as former Twitter CEO Jack Dorsey stepped down from the board.
This brings the total equity commitment of the deal from $27.25 billion to $33.5 billion, thereby reducing the total amount of debt Musk would incur after the takeover is complete. The additional funding of $6.25 billion also comes as the billionaire dropped his plans to take a loan against his stake in his EV company Tesla.
Twitter shares jumped after the news was out, gaining about 5.1% to $39.06 during pre-market trading in New York on Thursday. While it is just shy of $40, it is well below Musk’s offer price of $54.20 per share.
Musk had originally decided to take a loan of $12.5 billion against his stake in Tesla to fuel the acquisition of Twitter, an amount which he later reduced by half this month after he brought in co-investors. His original plan to acquire the social media juggernaut was a combination of personal equity ($21 billion) and loans ($25.5 billion). Out of this amount, $12.5 billion would come against the Tesla shares he owns.
This will come as a relief to Tesla shareholders, especially since the shares of the EV company have tanked by over 30% of their value over a month.
It is unknown where the additional $6.25 billion will come from, but we do know that Musk has bagged $7.1 billion in private equity funding, including from Larry Ellison, the founder of computer tech company Oracle, and Qatar Investment Authority, the sovereign wealth fund of Qatar.
He is also seeking additional funding from investors and is in talks with shareholders, including ex-Twitter CEO Jack Dorsey, for additional financing commitments.