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Revealed: How Elon Musk Plans To Pay For Twitter – Forbes


Elon Musk continues to make the headlines, with details emerging of how he plans to fund his $44 billion offer for Twitter, which was reluctantly recommended to shareholders by Twitter’s board of directors last month. 

A filing on May 5 with the The Securities and Exchange Commission (SEC) lists the organizations who are supporting Musk’s plans to finance the acquisition of Twitter. 

If you are interested in trading Twitter stocks and shares, please check out our article on the topic.

Despite his estimated net worth of nearly $250 billion, Musk has called on a group of equity investors including tech magnate Larry Ellison, the Qatar state investment fund and the cryptocurrency exchange Binance to raise a further $7.1 billion in funding.

Musk’s original financing package for Twitter comprised $21 billion in cash and $12.5 billion of margin loans secured against his 16% stake in Tesla, together with $13 billion in loans from a consortium of banks. 

Musk’s latest round of equity financing has reduced the size of the loan against his Tesla shares from $13 billion to $6.25 billion. This may alleviate the recent pressure on the Tesla share price over concerns that Musk might sell Tesla stock as part of the financing deal.

In addition, the Saudi Arabian investor Prince Alwaleed Bin Talal has agreed to retain his $1.9 billion stake in Twitter, rather than cash out his holding on the takeover. 

This represents a significant turnaround after Prince Alwaleed tweeted that Musk’s proposed offer of $54.20 did not come “close to the intrinsic value of Twitter given its growth prospects” last month. 

Prince Alwaleed yesterday praised Musk on Twitter, commenting that: “I believe you will be an excellent leader for Twitter to propel and maximize its great potential.” 

The involvement of Prince Alwaleed, together with the Qatari state investment firm, may raise some eyebrows given Musk’s proclaimed commitment to free speech. On this note, Musk tweeted Prince Alwaleed a few weeks ago to ask, “What are the Kingdom’s views on journalistic freedom of speech?”

Who’s providing the additional funding for Twitter?

According to the latest SEC filing, the following parties have committed to provide cash funding to support the acquisition:

The following investor will retain his stake in Twitter:

Range of backers

The entities providing over $7 billion of funding include venture capital firms, tech moguls, cryptocurrency companies, sovereign wealth funds, property firms and mutual funds. 

Larry Ellison, the co-founder of Oracle, topped the table of investors, providing funding of $1 billion. Ellison has been a board director of Tesla since 2018 and was eighth on the Forbes 2022 Billionaires list.

Sequoia Capital Fund, a U.S. venture capital firm focused on technology, committed the second-highest amount of $0.8 billion, followed by the Dubai investment firm, VyCapital, which provided $0.7 billion. The sovereign wealth fund of Qatar also committed to contribute $0.4 billion.

Binance, one of the leading global cryptocurrency exchanges, provided funding of $0.5 billion. Changpeng Zhao, Binance’s billionaire chief executive officer, told CNBC earlier this week: “We’re excited to be able to help Elon realize a new vision for Twitter,” with Binance reportedly hoping to use its blockchain technology to tackle bots. 

The new round of financing may help to build confidence in Musk’s ability to close the Twitter deal, although a break-up fee of $1 billion is payable if he fails to secure sufficient financing.



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