Zoom / Oracle Corporation CEO Larry Ellison watches after Oracle Team USA, captain of James Spithill, lost race 1 in the America’s Cup finals on June 17, 2017 in Hamilton, Bermuda.
Xaume Oleros Getty Images
Elon Musk has raised $ 7.14 billion in funding for the $ 44 billion Twitter buy-in from investors, including Oracle co-founder Larry Ellison, cryptocurrency exchange Binance and asset management companies Fidelity, Brookfield and Sequoia Capital.
With the new financing commitments, Musk will halve the margin on a loan he has taken with a group of creditors to $ 6.25 billion and increase the share of equity to $ 27.25 billion. The rest of the purchase price will be paid with debt collected from world banks.
The Tesla boss was trying to secure outside support to join his bold offer on the social media platform, although traditional private leverage companies have largely shunned the deal.
The deal will turn Musk, a self-proclaimed “absolutist of free speech” with nearly 91 million followers on the site, into a social media baron with control over how millions of people receive news and information.
Shares of Twitter rose nearly 2 percent in pre-market trading to more than $ 50 on Thursday. But the stock price remains consistently below the $ 54.20 share offer made by Musk as investors worry he will not be able to complete the deal. The entrepreneur will have to pay $ 1 billion if he cancels the deal.
The biggest new support for his purchase comes from Ellison, who is also on board Tesla and contributes $ 1 billion to the Twitter deal. Venture capital firm Sequoia is providing $ 800 million, while Dubai-based technology investment company Vy Capital is providing $ 700 million. Binance provides $ 500 million.
Advertising
Saudi Prince Alwaleed bin Talal bin Abdulaziz al Saud, who is already a Twitter investor, will invest 35 million shares in the trade, which is equivalent to $ 1.9 billion in the offer price.
“It’s great to contact you, my ‘new’ friend @elonmusk,” the Saudi prince wrote on Twitter. “I believe you will be an excellent leader for @Twitter to drive and maximize its great potential.”
This is a reversal for Prince Alwaleed, who initially turned down Musk’s takeover bid when it was unveiled last month, saying he did not believe the offer was “close to Twitter’s inherent value, given its growth prospects”.
Musk also revealed that he is working to attract additional equity investors, including Twitter co-founder billionaire Jack Dorsey, by allowing existing shareholders to contribute their shares for the buyout. He added in the documentation that any additional contributions could replace parts of the funding commitments previously agreed.
The group of investors supporting Musk’s offer does not include many private investment groups that have held talks with the South African businessman, according to people familiar with the matter.
Two private equity executives said they decided not to participate in Twitter’s offer after deciding it would be difficult for them to influence the independent entrepreneur’s direction.
Musk says he will “unlock” the potential of Twitter to be a “platform for free speech around the world”, indicating that he intends to loosen its content moderation policies in an effort to reduce the site’s toxicity and abuse.
Twitter has written to advertisers in recent weeks to say that the company remains committed to ensuring that their ads are not placed alongside harmful or offensive content, amid growing concerns that Musk’s takeover will hurt its advertising business worthwhile. $ 4.5 billion a year.
Musk also seems to be clashing with regulators and politicians around the world. EU Internal Market Commissioner Thierry Breton told the FT that Musk-owned Twitter must comply with Brussels’ social media moderation or risk heavy fines or bans.
© 2022 The Financial Times Ltd. All rights reserved Do not distribute, copy or change in any way.
Add Comment