Elon Musk has secured $7 billion from new investors for his $44 billion acquisition of Twitter.
Among the 19 contributors backing the billionaire’s deal is Oracle co-founder and Tesla board member Larry Ellison, who pledged $1 billion.
Qatar’s State Investment Fund is providing $375 million, while Binance, the world’s largest cryptocurrency exchange, is raising $500 billion, according to a listing filing.
Despite being the richest person in the world, much of his wealth is tied to the value of Tesla.
He has said he will pay for the deal with a mix of loans, investments and cash.
Musk is expected to use about $8 billion of his recent sale of Tesla sharesand $13 billion in bank loans.
He also borrows against his Tesla holdings.
Thanks to the new $7 billion commitment, he can reduce his debt from $12.5 billion to $6.25 billion, according to a regulatory filing.
He later said he would no longer sell Tesla shares, which have fallen 15% in value over the past month.
What changes do the new investors want?
According to a source familiar with the matter, Musk will also temporarily become Twitter’s chief executive after the deal closes.
He is in talks with others for additional funding, including former Twitter boss Jack Dorsey.
Mr. Dorsey is the second largest single shareholder of the tech giant after Musk.
Saudi Arabian investor Prince Alwaleed bin Talal has agreed to put his $1.77 billion stake in Twitter in the deal rather than pay it off, the filing showed.
He said Musk is an “excellent leader” for the site, although he previously opposed the acquisition.
Sequoia Capital, a Silicon Valley venture capital giant, will provide $800 million, while an additional $700 million will be provided by VyCapital, a Dubai-based investment group.
Binance CEO Changpeng Zhao framed his investment as a move toward “crypto Twitter,” saying it was a “small contribution to the cause.”
“We hope to play a role in bringing social media and Web3 together and expanding the use and adoption of crypto and blockchain technology,” he said.
Technology venture capitalist Ben Horowitz said his firm, known as Andreessen Horowitz, or a16z, is putting in $400 million because it believes in Musk’s “brilliance in finally making it what it should be.”
“While Twitter shows great promise as a public space, it suffers from a variety of difficult issues ranging from bots to abuse to censorship,” he said.
“Being a public company that relies solely on an advertising business model exacerbates all of this.”
There has been much speculation about how Musk might change the platform.
He said governments and commercial companies could face “small costs”.
In tweets that were subsequently deleted, Musk proposed changes to Twitter Blue’s premium subscription service, including a price drop, an advertising ban and the ability to pay with the cryptocurrency Dogecoin.
As well as railing against Twitter’s alleged restrictions on free speech, he has spoken of a desire for new features to improve the user experience while boosting trust by authenticating all users as humans to combat spam bots.
Wedbush analyst Dan Ives said Musk’s deal has a 75 percent chance of closing before the new funding, but now the likelihood of it being successful is 90 to 95 percent.
He said the new backers were a “who’s who” list of investors from Wall Street and Silicon Valley and showed “it’s not Musk trying to single-handedly turn Twitter around.”
If Musk were forced to back out of the deal, he would be hit with a $1 billion termination fee.
Elon Musk secures £7bn from new investors to pay for Twitter takeover | business news
Source link Elon Musk secures £7bn from new investors to pay for Twitter takeover | business news