Elon Musk says he’s secured $46.5 billion in financing to buy Twitter.

Published: April 23, 2022
Updated: April 23, 2022
Elon Musk
Elon Musk

You won’t believe how Elon Musk is going to buy Twitter.

According to a filing with US regulators, Elon Musk said on Thursday that he has secured $46.5 billion in debt and equity financing to buy Twitter Inc and is considering taking his offer directly to shareholders.

Elon Musk said in a filing with US regulators on Thursday that he has secured $46.5 billion in debt and equity financing to buy Twitter Inc (TWTR.N) and is considering taking his offer directly to shareholders.

Elon Musk has pledged $33.5 billion to finance the transaction, including $21 billion in equity and $12.5 billion in margin loans against some of his Tesla Inc (TSLA.O) shares. He is the CEO of Tesla, an electric vehicle manufacturer.

Elon Musk, the world’s richest man, according to Forbes, made a “best and final” cash offer of $43 billion to Twitter’s board of directors on April 14, claiming that the social media company needed to be taken private in order to grow and become a platform for free speech.

However, Twitter ignored his offer and used a “poison pill” to thwart him. According to the filing on Thursday, Musk is also considering a tender offer to buy all of the company’s stock from shareholders but has yet to decide.

Musk, Twitter’s second-largest shareholder with a 9.1 percent stake, has hinted that the microblogging company, where he has a following of more than 80 million users, could undergo significant changes.

On hearing of the funding, Twitter’s stock rose less than 1%, indicating that the market is still skeptical of the deal.

Alos Read Twitter Investors sue Elon Musk for failing to promptly disclose the size of his stake.

Following a strong quarterly report, Tesla shares rose more than 3%, and the value of Musk’s 172.6 million Tesla shares increased by more than $5 billion on Thursday. After Tesla met profit and revenue targets on Wednesday, he qualified for compensation in the form of stock options, which are now worth about $24 billion.

Elon Musk hasn’t said whether he’d sell Tesla stock to cover the $21 billion equity financing. According to a margin loan commitment letter, Musk “may sell, dispose of, or transfer” unpledged Tesla stocks at any time.

According to the filing, banks, including Morgan Stanley, have agreed to provide another $13 billion in debt secured against Twitter.

Musk’s proposal was received, according to a Twitter spokesperson.

“As previously announced and directly communicated to Mr. Musk, the board is committed to conducting a careful, comprehensive, and deliberate review to determine the course of action that it believes is in the best interest of the company and all Twitter stockholders.”

Elon Musk

Musk’s latest filing, according to Ryan Jacob, chief investment officer at Jacob Asset Management, which owns Twitter stock, will force Twitter’s board to respond.

“They had to think about the seriousness of the offer,” he said, adding that the filing might help. “It’ll be difficult for them to ignore it.”

According to Reuters, Musk’s offer has piqued private equity interest in a Twitter deal, according to people familiar with the situation.

Apollo Global Management Inc (APO.N) is looking into ways to fund any deal and is willing to work with Musk or any other bidder, while Thoma Bravo has said on Twitter that it is looking into putting together a bid.

According to the New York Post, Thoma Bravo is in talks with Elon Musk for a joint venture. A request for comment from Thoma Bravo was not returned.

On the platform, Elon Musk has made a number of announcements, some of which have landed him in hot water with US regulators.

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