- Twitter rose 5.5% in premarket trading after Elon Musk pledged to put up more of his own wealth for a buyout.
- The Tesla CEO’s plan now includes another $6.25 billion of equity to fund the proposed $44 billion deal.
- Musk will no longer rely on margin loans backed by Tesla shares, per The Wall Street Journal.
Twitter stocks rose more than 5% in premarket trading Thursday after Elon Musk fronted more of his own wealth to fund his $44 billion buyout offer.
Musk will put up another $6.25 billion of equity for the deal, lifting the total to $33.5 billion from an initial $27.25 billion, according to an SEC 13D filing on Wednesday.
It also said Musk is talking to Twitter shareholders, such as the social-media platform’s former CEO Jack Dorsey, about the possibility of their retaining the stock after the proposed takeover, as a way to get more financing for the deal.
Tesla CEO Musk has abandoned plans to rely on a margin loan against his shares in the electric-vehicle maker, The Wall Street Journal reported.
Musk’s renewed commitment to the Twitter bid follows a period of uncertainty, where he declared the takeover “temporarily on hold”. That came after a company filing said less than 5% of the platform’s accounts are spam or fake — something Musk has cast doubt on.
Twitter said in April it had accepted Musk’s buyout offer, pending regulatory approval by shareholders. The deal is expected to close in 2022.
The company’s shareholders voted against re-electing an ally of Musk, Egon Durban, to the board at an annual meeting Wednesday, reports said. Durban is co-head of private equity firm Silver Lake.
Either party can walk away for the deal for a $1 billion break-up fee. Twitter’s CEO said last week the company remains committed to enforcing Musk’s merger agreement at an offer of $54.20 a share.
Twitter was up 5.7% in premarket at $39.26, but the stock is down about 14% year-to-date. Its slide has come amid a broad tech stock sell-off as investors weigh up rising interest rates, Russia’s invasion of Ukraine, and
Meanwhile, Tesla was less than 1% lower premarket at $655.45, as investors assessed the impact of Musk’s move on the stock. Its price has fallen about 38% this year.
Those losses have hit Musk’s net worth, which has dropped below $200 billion, according to Bloomberg Billionaires Index.
Tags: #Twitter #Elon #Musk #Pledges #Billion #Fund #Buyout