Tesla boss Elon Musk receives support from investors in the Twitter takeover.
(Photo: AP)
san francisco Tesla boss Elon Musk has secured $7 billion from a group of investors for the $44 billion takeover of Twitter. Among them are Oracle co-founder Larry Ellison, crypto exchange Binance and wealth management firms Fidelity, Brookfield and Sequoia Capital and Qatar Holding, according to a stock exchange release on Thursday.
Ellison alone, who is considered a friend of Musk, provides around one billion dollars. Venture capital firm Sequoia is providing $800 million, while Dubai-based tech investment firm Vy Capital is providing $700 million. Binance wants to contribute $500 million.
In addition, Saudi Prince Alwalid bin Talal has agreed to bring in his nearly $2 billion stake instead of monetizing it. He had previously rejected a sale to Musk. Musk then made critical inquiries about freedom of expression in Saudi Arabia. The prince wrote in a tweet that Musk was a “new friend”.
It was previously announced that Musk reduced his margin loan to $6.25 billion from $12.5 billion and increased his funding commitment to $27.25 billion. Musk also shared that he is working to onboard more investors, including billionaire Twitter co-founder Jack Dorsey. In doing so, he would give existing shareholders the opportunity to contribute their shares to the company’s buyout.
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The company’s board of directors had cleared the way for the platform to be sold to Musk. However, the deal will probably no longer be decided in May: “The deal must be approved by the shareholders, but it is not on the agenda of the annual general meeting on May 25,” said lawyer Andrew Thorpe from the Mintz Levin law firm to the Handelsblatt. “At a later date – probably in June or July – there will be an extraordinary shareholder meeting where Twitter shareholders will vote on the acquisition.”
Musk had announced that he would unlock Twitter’s potential as a “platform for free speech around the world” and indicated that he would relax the rules on content moderation in order to do so. According to critics, this could lead to significantly more hate messages and false reports being spread on Twitter.
Musk could temporarily run Twitter himself
As a result, advertisers worry that their ads might appear next to harmful or offensive content. The company had written to advertisers and assured them that would not happen. However, Twitter had not given any details.
Twitter shares initially rose more than four percent to around $51 on Thursday. However, the stock price has consistently remained below Musk’s offer of $54.20 per share. Analysts suspected investors could fear that the purchase of Twitter would burst after all. In that case, Musk would have to pay $1 billion in compensation.
According to a media report, Musk himself will initially take over the top post on Twitter after the takeover. The broadcaster CNBC reported, citing insiders, that Musk could lead Twitter for a few months.
Twitter initially stated that Musk wanted to work with CEO Parag Agrawal. However, the relationship between the two is considered tense, especially when it comes to freedom of expression and the containment of false information. Saudi Prince Alwalid bin Talal wrote in his tweet that he believed Musk would make an excellent boss.
Just last week, the board of directors of the US short message service approved the takeover by Musk. According to insiders, during the financing talks with banks, he has already stated that he wants to find new ways to monetize tweets and cut executive salaries. At the moment, Twitter has around 217 million users.
With agency material.
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