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Tesla and SpaceX boss Elon Musk has received letters from investors committing nearly $7.14 billion in new financing for his takeover of social media giant Twitter, according to a regulatory filing on Thursday. Musk is also in talks to bring Twitter co-founder Jack Dorsey and others on board as investors.
The filing listed 19 investors, including existing Twitter shareholder Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud of Saudi Arabia, who is committing around 35 million shares of the company to retain an investment in it after Musk takes it private, as well as sovereign wealth fund Qatar Holding, a trust of Oracle Corp. co-founder Larry Ellison, and venture capital firms Sequoia Capital and Andreessen Horowitz.
Musk received “equity commitment letters … providing for an aggregate of approximately $7.139 billion in new financing commitments” in connection with the deal for Twitter, the regulatory filing said.
That means that the $12.5 billion margin loan he had received to acquire the social media giant has been reduced to $6.25 billion, with the takeover now to be financed by $27.25 billion in equity and cash, it explained.
Musk is also in talks to bring more current Twitter shareholders, including Dorsey, on board as investors after the buyout, according to the filing. He “is having, and will continue to have, discussions with certain existing holders of common stock (including Jack Dorsey) regarding the possibility of contributing such shares of common stock to parent, at or immediately prior to the closing of the merger, in order to retain an equity investment in Twitter following completion of the merger in lieu of receiving merger consideration in the merger,” the filing said. “Subject to the terms of the merger agreement, any such contribution commitments may replace portions of the financing commitments” previously reported by Musk.
Ben Horowitz, co-founder and general partner at Andreessen Horowitz, tweeted about the firm’s investment. “We are joining Elon Musk’s bid for Twitter and investing $400MM into the company,” he wrote. “We invested, because we believe in (founders) Ev (Williams) and Jack’s vision to connect the world and we believe in Elon’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. Being a public company solely reliant on an advertising business model exacerbates all of these.”
He added: “Elon is the one person we know and perhaps the only person in the world who has the courage, brilliance, and skills to fix all of these and build the public square that we all hoped for and deserve.”
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