Elon Musk secures US$7.1 bn in financing commitment for Twitter buyout

Highlights 

• On March 25, Musk announced the acquisition of Twitter for US$44 billion.
• Musk is pooling capital to get through one of the most discussed business deals.
• Besides Musk, 18 co-investors have pledged around US$7.1 billion.   

Tesla CEO Elon Musk has secured about US$7.1 billion in financing commitment from investors, according to filings with the Securities and Exchange Commission (SEC) on Thursday.

Those who have committed funds include Binance, Brookfield Asset Management, Qatar Holding, and Fidelity Management & Research, the 13D filing with the SEC shows.

On April 25, Tesla Founder Elon Musk announced the acquisition of social media platform Twitter for US$44 billion. The transaction is expected to be completed in 2022, subject to approvals from the stockholders and regulators.  

Oracle Corporation co-founder Larry Ellison, a Tesla board member who also holds a stake in the company through his trust, has promised funds for the acquisition.

Lawrence J. Ellison Revocable Trust committed US$1 billion, the highest contributor out of the 18 co-investors. Venture capital firm Sequoia Capital gave US$800 million, VyCapital provided US$700 million, and cryptocurrency exchange Binance pledged US$500 million. 

Musk sold around US$8.5 billion worth of his Tesla stocks to raise funds for the Twitter deal. The billionaire entrepreneur is also in talks with Twitter co-founder Jack Dorsey for funds. 

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Who else is financing the deal?

Saudi prince Alwaleed Bin Talal has pledged US$1.89 billion. He was initially against the buyout. In a tweet, Binance founder Changpeng Zhao said Binance’s funding commitment is "a small contribution to the cause", referring to Musk’s pledge to make Twitter a free speech platform.

Other co-investors include a16z, Qatar Holdings, Aliya Capital Partners, Strauss Capital, BAMCO Inc., DFJ Growth IV Partners, Witkoff Capital, Key Wealth Advisors, A.M. Management & Consulting, Litani Ventures, Cartenna, and Honeycomb Asset management. 

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Musk’s US$21-billion financing commitment in equities has been revised to US$27.25 billion, according to the filing. With this new financing, Musk has the chance to reduce the margin loan to US$6.25 billion from the earlier US$12.5 billion. 

Bottom line:

After the news, the Twitter (TWTR) stock was up 2.65% to US$50.36, while the TSLA stock traded 1.48% lower to US$938.505 in the premarket on Thursday. In the crypto market, the Binance (BNB) coin also rose 3.61% to US$404.54 following the news.