Investors back Elon Musk Twitter bid with $7 billion
Silicon Valley's Oracle co-founder Larry Ellison is in for $1 billion
Elon Musk has strengthened the equity stake in his $44 billion offer to buy Twitter with commitments of more than $7 billion from a diverse group of investors including Silicon Valley heavy hitters like Oracle co-founder Larry Ellison.
A regulatory filing Thursday also said that Musk is in talks with others for additional funding, including former Twitter CEO Jack Dorsey, the social media platform’s second-largest individual stakeholder after Musk.
Ellison, who is also a board member of electric vehicle maker Tesla, is making the biggest contribution, pegged at $1 billion. Musk is Tesla’s CEO and biggest shareholder.
Other investors include tech investor Sequoia Capital Fund, which pledged $800 million, and VyCapital, which committed to $700 million, according to the filing with the U.S. Securities and Exchange Commission.
Also, Saudi Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud has pledged 35 million Twitter shares worth about $1.76 billion, according to the filing.
The 18 investors are a “who’s who” list of Wall Street and Silicon Valley investment firms, said Wedbush analyst Dan Ives, who follows Twitter and Tesla. Before Thursday’s announcement, Ives gave the deal a 75% chance of closing, but now it’s 90% or 95%, he said.
The high profile investors show “that it’s not Musk single-handedly trying to turn around Twitter,” Ives said.
Other investors backing Musk are technology venture capitalist Ben Horowitz, who said his firm, known as Andreessen Horowitz, or a16z, is putting in $400 million because it believes in Musk’s “brilliance to finally make it what it was meant to be.”
“While Twitter has great promise as a public square, it suffers from a myriad of difficult issues ranging from bots to abuse to censorship,” Horowitz tweeted Thursday. “Being a public company solely reliant on an advertising business model exacerbates all of these.”
Sequoia has invested in Zoom, DoorDash, Apple, Netflix and others. “We help the daring build legendary companies,” is a headline on its website.
The firm has a long history with Musk. It was an early investor in what would become PayPal, which Musk co-founded and was sold for $1.5 billion in 2002.
A $500 million commitment from cryptocurrency exchange Binance raised the possibility that Musk plans to incorporate cryptocurrencies and related technologies into his vision for Twitter, in the mold of so-called Web3 businesses that aim to create a new stage of the internet. Andreessen Horowitz has also in recent years prioritized investing in cryptocurrency startups.
Originally Musk had committed to borrowing $12.5 billion with Tesla stock as collateral to buy San Francisco-based Twitter. He also would borrow $13 billion from banks and put up $21 billion in Tesla equity.