Elon Musk Said to Become Temporary Twitter CEO; Raises $7 Billion in New Funding: Report
The figure has been pledged by several new co-investors, including Oracle co-founder and Tesla board member Larry Ellison, popular cryptocurrency exchange Binance, and asset management firms Sequoia Capital, Vy Capital, Fidelity, and Brookfield.
Musk’s original financing for the $44 billion deal comprised $13 billion in debt financing, a $12.5 billion margin loan commitment from Morgan Stanley and 11 other banks, secured in part by his holdings in Tesla, and $21 billion in equity financing from himself and co-investors.
The backing from his new partners will allow Musk to halve the margin loans he had lined up from various lenders to $6.25 billion and up the equity investment portion of his financing for the deal to $27.25 billion.
Ellison leads this round of investment with a $1 billion contribution, followed by Sequoia Capital’s $800 million pledge. Dubai-based tech investment firm Vy Capital has committed $700 million towards the deal, while Binance has gone in for $500 million.
Binance CEO Changpeng Zhao told the Financial Times his company will provide Musk with almost unconditional support for his acquisition of Twitter, despite the deal having been struck hastily. “It’s more of a blank check,” Zhao said.
“We, from our friends, heard that [Musk] was looking for third party investors, and are we interested? We immediately said that we are,” Zhao added. The Binance chief echoed reports that Musk doesn’t have much of a business plan for Twitter. “He didn’t have a plan for Twitter. There isn’t, like, a business plan. So it wasn’t that type of discussion.”
You can see the full list of new equity investors lined up by Musk below:
So far, what we do know about Musk’s plans is that it entails job cuts and a potential reduction in content moderation, given that he envisions Twitter as “the platform for free speech around the globe.” Reports from earlier this week indicated he plans to take Twitter public again in as little time as three years after he takes it private.
The celebrity billionaire continues to seek co-investors for the deal to help reduce how much of it will be financed by margin loans, and he is even trying to convince existing shareholders to buy in.
Musk has already managed to bring Saudi Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud, who owns 35 million shares in Twitter (worth around $1.9 billion at Musk’s offer price of $54.20 per share) and was originally opposed to the deal, onboard with the idea.
The electric vehicle pioneer also wants Twitter co-founder Jack Dorsey to maintain his shareholding once the company goes private. Dorsey was reportedly one of the driving forces behind Musk’s decision to go after Twitter in the first place.
In a separate report, sources told CNBC Musk is expected to become temporary CEO after the Twitter deal closes. The position would stretch Musk’s CEO roles to numerous companies, including SpaceX, Tesla, The Boring Company and Neuralink.
The Twitter-Musk deal is expected to close later this year, subject to the approval of Twitter shareholders and regulators. If Musk backs out of the transaction, he will be liable to pay $1 billion.