TWITTER ACQUISITION
WASHINGTON: Elon Musk is in talks with large investment firms and high net-worth individuals about taking on more financing for his $44 billion acquisition of Twitter and tying up less of his wealth in the deal, people familiar with the matter said.
Musk is the world’s richest person, with Forbes estimating his net worth at about $245 billion. Yet most of his wealth is tied up in the shares of Tesla Inc, the electric car maker he leads. Last week, Musk disclosed he sold $8.5 billion worth of Tesla stock following his agreement to buy Twitter.
The new financing, which could come in the form of preferred or common equity, could reduce the $21 billion cash contribution that Musk has committed to the deal as well as a margin loan he secured against his Tesla shares, the sources said.
The banks that agreed last month to provide $13 billion in loans based on Twitter’s business balked at offering more debt for Musk’s acquisition given the San Francisco-based company’s limited cash flow, Reuters reported last month.
Musk has also pledged some of his Tesla shares to banks to arrange a $12.5 billion margin loan to help fund the deal. He may seek to trim the size of the margin loan based on the new investor interest in the deal financing, one of the sources said.
Musk said on Monday he wants to expand the reach of Twitter beyond the current “niche” until most Americans use the social media platform.
He told reporters gathered on the red carpet at the annual Met Gala in New York that an important measure of success would be whether Twitter could expand its audience significantly.
“Right now it’s sort of niche. I want a much bigger percentage of the country to be on it, engaging in dialogue,” said Musk.