Elon Musk is looking at how to invest less for his $44 billion acquisition of Twitter. Sources report that the CEO of Tesla is in talks with large corporations and high net worth individuals to obtain financing.
Elon Musk in talks to invest less of his wealth for the acquisition of Twitter
According to a report by Reuters, the world’s richest man with an estimated $219 billion in assets, Elon Musk, is in talks with large investment firms and high net worth individuals to obtain financing for the Twitter deal.
As previously reported, for the $44 billion purchase of Twitter, Elon Musk has reportedly launched his all-cash bid, offering $54.2 per share from about $49.93 at the time of the news.
Sources report that Musk seems to want to put less of his wealth into the Twitter deal, even though he had revealed last week that he had sold $8.5 billion in Tesla stock, precisely due to the deal to buy Twitter.
With the new funding, which could come in the form of preferred or common stock, Musk could reduce the cash contribution he has committed to the deal by $21 billion, as well as a margin loan he has secured against his Tesla shares.
Elon Musk and high-net-worth investment firms to jointly acquire Twitter
Musk’s search for funding appears to be aimed at several market players. Among the many, here are the banks with which he has already pledged some of his Tesla shares, so as to arrange a margin loan of $12.5 billion to help finance the deal.
Not only that, Musk has also approached other large investors such as private equity firms, hedge funds and high net worth individuals to receive preferred equity financing.
In this case, the preferred equity would pay a fixed dividend from Twitter, in much the same way that a bond or loan pays regular interest, but would appreciate in line with the company’s capital value.
Among the names that have popped up in sources are the private equity firms of Apollo Global Management Inc and Ares Management Corp. But also major Twitter shareholders such as former social network CEO Jack Dorsey, who is considering whether to actively participate in the deal or just cash out. Fidelity is also among the big names of institutional investors involved in the Musk deal.
In this regard, Wall Street tech analyst and CEO of Wedbush Securities, Dan Ives, said:
Tesla shares up on Reuters article saying Musk seeking partners for financing on Twitter deal. This is big if it materializes as we believe the Twitter deal has been a $100+ per share overhang on Tesla’s stock due to the Musk financing concerns/shares tied up.
— Dan Ives (@DivesTech) May 2, 2022
“Tesla shares up on Reuters article saying Musk seeking partners for financing on Twitter deal. This is big if it materializes as we believe the Twitter deal has been a $100+ per share overhang on Tesla’s stock due to the Musk financing concerns/shares tied up”.
Mark Cuban’s involvement to use DOGE as a solution to spam
But there are other billionaires who are involved in Elon Musk’s Twitter mission, even though it’s not related to the acquisition, but to the freedom of speech advocated by the CEO of Tesla.
Recently, Mark Cuban, billionaire entrepreneur and president of the Dallas Mavericks NBA basketball team intervened in a discussion on the social network to suggest the use of Dogecoin (DOGE), the memecoin par excellence, to solve the problem of spam on Twitter.
Both Elon Musk and DOGE co-founder Billy Marcus seem to agree with the idea. The thought is to have all users deposit 1 DOGE per post on Twitter. When these posts are reported as spam by other users, if they are confirmed as spam after verification, spammers would have to give up their DOGE, conversely the reporter would have to do so.
Source: https://en.cryptonomist.ch/2022/05/04/elon-musk-downplays-outflow-from-his-own-assets-for-twitter-deal/