Musk secures $7 billion in additional funding from investors and friend Larry Ellison to fund his $44B takeover of Twitter
As you may recall, late last month Elon Musk sold over $8.4 billion worth of Tesla shares to fund his $44 billion takeover of Twitter. According to the Securities and Exchange Commission (SEC) filings, Musk sold 4.4 million shares of Twitter on April 26 and 27. Now, Musk has secured additional funding from investors and friends.
According to Thursday’s SEC filing, Musk has secured $7.14 billion in funding from a group of investors that includes Oracle Corp co-founder Larry Ellison, Sequoia Capital, and the cryptocurrency exchange giant Binance. Larry Ellison, who is also a board member at Tesla and a self-described close friend of Musk, committed $1 billion for the funding.
In addition, Saudi Arabian Prince Alwaleed bin Talal, who had initially opposed the buyout, also agreed to chip in a $1.89 billion stake into the deal rather than cashing out, the filing showed.
|Equity Investor||Aggregate Equity Commitment|
|A.M. Management & Consulting||$25,000,000|
|AH Capital Management, L.L.C. (a16z)||$400,000,000|
|Aliya Capital Partners LLC||$360,000,000|
|BAMCO, Inc. (Baron)||$100,000,000|
|DFJ Growth IV Partners, LLC||$100,000,000|
|Fidelity Management & Research Company LLC||$316,139,386|
|Honeycomb Asset Management LP||$5,000,000|
|Key Wealth Advisors LLC||$30,000,000|
|Lawrence J. Ellison Revocable Trust||$1,000,000,000|
|Qatar Holding LLC||$375,000,000|
|Sequoia Capital Fund, L.P.||$800,000,000|
|Strauss Capital LLC||$150,000,000|
|Tresser Blvd 402 LLC (Cartenna)||$8,500,000|
The funding revelation comes as Musk’s margin loan was reduced to $6.25 billion from $12.5 billion announced earlier, according to the filing. In addition, Musk’s initial $21 billion financing commitment was also revised to $27.25 billion.
“On May 4, 2022, Parent received equity commitment letters, substantially in the form attached hereto as Exhibit M (the “Co-Investor Equity Commitment Letters”), from each of the investors (or one or more of such investor’s affiliates) listed in the following two tables (each such investor, or one or more of its affiliates, an “Equity Investor”), providing for an aggregate of approximately $7.139 billion in new financing commitments in connection with Parent’s proposed acquisition of Twitter pursuant to the Merger Agreement, subject to the conditions set forth in the Co-Investor Equity Commitment Letters.”
The filing also shows that Musk will continue to hold talks with existing shareholders of Twitter to contribute shares to the proposed acquisition, the filing showed. Other investors include Qatar Holding LLC which also contributes $375 million.
On April 25, Twitter agreed to sell the company to Elon Musk for $44 billion. Under the terms of the agreement, Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing the proposed transaction.
The purchase price represents a 38% premium to Twitter’s closing stock price on April 1, 2022, which was the last trading day before Mr. Musk disclosed his approximately 9% stake in Twitter. Musk needed to use his Tesla stock to raise $21 billion in equity to fund his takeover of the social media giant.tm2214608-1_sc13da