Elon Musk secures $7.1bn investment; could become interim Twitter CEO
What's the story
We all remember Elon Musk's refusal to accept a seat on Twitter's board and then storming back with an offer to acquire the company. It now seems like he will become Twitter's CEO for a few months after his $44 billion deal is complete. Musk has also raised $7.1 billion from several investors, including Oracle founder Larry Ellison and Saudi Prince Alwaleed bin Talal.
Context
Why does this story matter?
Despite all the noise surrounding Musk's acquisition of Twitter made, the market was never confident in the deal happening. However, the $7.1bn investment lined up has increased the optimism surrounding the takeover. The reduced gap between Twitter's stock price and Musk's $54.20/share offer is a sign of that. His role as the temporary CEO of Twitter will help the company in its transition.
Financing
Musk gets $7.1bn from 19 investors to finance Twitter deal
Elon Musk has lined up 19 investors to contribute to his $44 billion acquisition. The investors will contribute $7.1 billion. The investments are set to reduce Musk's proposed loan of $12.5 billion from banks to $6.25 billion. This also means that fewer of his Tesla shares will be used as collateral. The financing has increased the market's confidence in the completion of the deal.
Investors
Prince Alwaleed Bin Talal commits Twitter shares worth $1.9bn
Larry Ellison, the co-founder of Oracle, leads the group of investors with the single largest contribution of $1 billion. Other major investors include Sequoia Capital with $800 million and crypto exchange Binance with $500 million. Saudi Arabian Prince Alwaleed Bin Talal, who previously opposed Musk's acquisition, has agreed to commit shares worth $1.9 billion to retain a stake in the 'new' company.
Funding the deal
Musk vows to line up $27.25 billion worth equity
Apart from the $7.1 billion lined up, Musk is also in talks with Twitter co-founder Jack Dorsey and others to raise more money. He has already sold more than $8.5 billion of Tesla stock to finance the deal. The latest SEC filing saw Musk vowing to line up $27.25 billion worth of equity to fund the takeover. The rest will be covered by loans.