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Elon Musk increases his equity component in the Twitter deal to $33.5 billion and provides another $6.25 billion in funding, which cuts his margin loan to zero.
Elon Musk is dropping plans to partially fund his Twitter purchase with a margin loan tied to his stake in Tesla and raise the deal's equity to $33.5 billion. It will provide an additional $6.25 billion in equity for the buyout, according to the statement. This amount is enough to liquidate the same amount of margin loan that was already reduced earlier this month.
The statement also indicated that Musk continues to seek additional financial commitments to fund a $44 billion deal to buy Twitter. He is in talks with Twitter co-founder Jack Dorsey and other investors to invest their capital in a private company.
The Twitter purchase has initially relied on Musk's $21 billion of equity that he has to come up with and $12.5 billion in margin loans secured by his Tesla stock. The margin loan was cut to $6.25 billion on May 5 after the head of Tesla announced that he had received equity commitments from other investors.
Musk said last week that his proposal would not go ahead until Twitter provided proof that fake/bot accounts make up less than 5% of its total users. In his original proposal, Musk relied on the information that was provided in the official Twitter filing. However, multiple factors, including independent audits, show that the number of fake/bot accounts on the platform could be as high as 20%. Twitter refuses to provide extended information about its claim of the number of fake/bot accounts and the methods used to count it while claiming that any other checks are wrong.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.