Elon Musk pledges $6.25 billion equity financing to buy Twitter, scraps margin loan

Elon Musk on Wednesday pledged an additional $6.25 billion in equity financing to fund the $44 billion bid for Twitter Inc, reducing the billionaire’s margin loan against his Tesla Inc stock to zero.

The disclosure in a regulatory filing on Wednesday said Musk was pushing hard to get the deal done even though he last week linked his progress to Twitter presenting evidence that spam bots made up less than 5% of the total number of users. users.

While doubting spambots make up at least 20% of users, the world’s richest man and Tesla boss had suggested he might charge a lower price for the social media company.

Musk said Wednesday he was also in talks with shareholders, including Jack Dorsey, for additional funding commitments to fund the deal.

Twitter shares jumped around 6% to $39.15 in extended trading. Musk could not immediately be reached for comment.

It initially took out a $12.5 billion margin loan, but earlier this month cut it to $6.25 billion after bringing in co-investors.

By April, Musk had lined up $46.5 billion in debt and equity financing to buy Twitter, with Musk himself committing $33.5 billion. Read more

After Musk’s bid, Twitter’s board initially voted to pass a poison pill that limited its ability to increase its stake, but then voted unanimously to accept his takeover offer.

Twitter said last week that it had committed to closing the deal at the agreed price of $54.20. Separately, at an annual shareholder meeting on Wednesday, Twitter investors blocked the re-election of a Musk ally to its board.

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Carol M. Barragan