There’s a new development in the Twitter-Elon Musk deal, and this time, it’s a financial one rather than a juicy controversy.
In his latest step, Musk has removed Tesla shares as collateral to secure financing for his acquisition of Twitter.
He declared the expiry of margin loans in a new filing with the Security and Exchanges Commission (SEC).
When Musk first penned the offer to buy Twitter, he committed $21 billion of his own money, and the rest was acquired through loans. He used Tesla shares as collateral to get $12.5 billion as a loan.
Earlier this month, a bunch of investors — including Oracle founder Larry Ellison, venture capital firms a16z, Qatar Holding, and Sequoia Capital, and cryptocurrency exchange Binance — pumped in $7 billion towards the deal.
After securing this money, Musk cut his Tesla shares-backed loan in half to $6.25 billion. But in the latest filing, he’s completely removed this loan in the financing plan to acquire the social media company.
Now, the Tesla CEO is committed to providing $33.5 billion through equity financing. A report by CNBC notes that Musk is talking with Twitter co-founder Jack Dorsey amongst others to provide additional funding.
Musk’s move could be a result of continuously plummeting Tesla stock. The EV maker’s shares have dipped by almost 47% from its all-time high achieved in November 2021.
This news has had a positive impact on Twitter shares though, which are trading at around $39 after hours. But they’re still well below Musk’s offer price of $54.20.
Since agreeing to the deal in April, a lot has happened. Musk has pitched ideas for making money through Twitter, including launching a mysterious new paid product.
A few weeks ago, Musk put this deal on “hold,” because of the issue of bots on Twitter. And neither party is agreeing on the number of automated spam accounts.
While this stalemate made a lot of people think about the state of the deal, Musk’s latest SEC filing seems like a positive step for his Twitter acquisition.