Elon Musk Takes Giant Step Toward Finalizing Twitter Acquisition by Securing a Massive Pile of Cash
Tesla and Space X CEO Elon Musk has raised more than $7 billion in equity commitments from 19 investors to back his purchase of Twitter.
The 19 include the tech billionaire’s friends, Qatar’s sovereign wealth fund and Prince al-Waleed bin Talal of Saudi Arabia, according to a Securities and Exchange Commission filing submitted Thursday.
Also among the investors are Oracle co-founder Larry Ellison, cryptocurrency exchange Binance and venture capital giants Sequoia Capital, Fidelity Investments and Brookfield Asset Management, according to the SEC disclosure and reporting from The Wall Street Journal.
All in all, Musk has raised about $7.139 billion in investment commitments, according to the SEC filing. The recently raised funds will halve the $12.5 billion Musk needs to pay in margin loans against his Tesla shares, The Associated Press reported.
Musk is conducting negotiations with other potential investors to bring them on board, the SEC filing said. The prospective investors include Twitter’s second-largest individual stakeholder, former CEO Jack Dorsey.
“In this game of high stakes poker the Ellison and impressive list of backers will remove more of an overhang from Tesla shares as the Musk leverage of shares now becomes less onerous,” Wedbush analyst Dan Ives said, according to the AP.
“This was a smart financial and strategic move by Musk that will be well received across the board and also shows the Twitter deal is now on a glide path to get done by the end,” Ives said.
After finishing his $44 billion takeover of the social media behemoth, Musk is expected to serve as the company’s interim CEO, sources told CNBC.
As such, he will replace incumbent CEO Parag Agrawal, who began his role as Twitter CEO in November.
Musk has planned a new CEO for the company, Reuters reported last month, citing sources familiar who refused to reveal the candidate’s identity.
The news of supposed plans to replace Agrawal came after Musk told Twitter chairman Bret Taylor that he had no confidence in the company’s present management, according to Reuters.
According to CNBC, one of Musk’s critiques of how the company is managed is that Twitter has “too many engineers not doing enough,” the report said.
Agrawal, however, is expected to remain as Twitter CEO until the sale and handover of the company to Musk is finished, Reuters reported.
Musk’s takeover of the company is expected to bring significant changes to the platform and how it’s run.
Known for pro-free-speech and anti-censorship stances, Musk is likely to push for more tolerance of various perspectives and less content moderation on the platform.
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said when announcing the deal to purchase the social media platform, according to the Wall Street Journal.
Another change Musk is expected to bring to the platform is making the source code of its algorithms open-source, allowing non-Twitter-insiders to view the code and recommend changes wherever necessary, the Wall Street Journal reported.
Musk has also hinted at bringing in end-to-end encryption to direct messages on Twitter.
E2EE is a privacy technology that stops an undesired third party from reading or secretly modifying data shared between the sender and recipient.
The technology is presently available in messaging apps such as WhatsApp, Telegram and Signal.
Twitter messages are not end-to-end encrypted.
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