Musk, the world's richest man, is also the CEO at Tesla and
heads two other ventures, The Boring Company and SpaceX.
Tesla shares dropped over 8 percent on Thursday, as
investors fretted that Musk's involvement with Twitter could distract him from
running the world's most valuable electric-car maker.
Twitter shares, on the other hand, extended gains and were
up about 4 percent at $50.89, closer to the deal price of $54.20, as investors
bet that the new funding made the completion of the deal more likely.
Parag Agrawal, who was named Twitter's CEO in November, is
expected to remain in his role until the sale of the company to Musk is
completed. CNBC first reported on Thursday that Musk plans to become CEO of
Twitter on an interim basis.
Earlier on Thursday, Musk listed a group of high-profile
investors who are ready to provide funding of $7.14 billion for his Twitter bid,
including Oracle's co-founder Larry Ellison and Sequoia Capital.
Saudi Arabian investor Prince Alwaleed bin Talal, who had
said last month that the deal price was not sufficient for him to sell his
shares, said Musk would be an "excellent leader" for Twitter and
agreed to roll his $1.89 billion stake into the deal.
"Great to connect with you my "new" friend
@elonmusk ... Kingdom Holding Company and I look forward to roll our ~$1.9 bn
in the "new" Twitter," Alwaleed said in a tweet.
Musk increased the financing commitment to $27.25 billion,
which includes commitments from 19 investors, while reducing a margin loan from
Morgan Stanley to $6.25 billion. He has already secured commitments for $13
billion in loans.
The other investors include crypto firm Binance, New
York-based real estate tycoon Steven Witkoff's firm and DFJ Growth IV Partners,
which has investments in the Boring Company, SpaceX, SolarCity and Tesla.
"We hope to be able to play a role in bringing social
media and web3 together and broadening the use and adoption of crypto and
blockchain technology," Binance CEO Changpeng Zhao said.
Reuters reported on Monday that Musk was in talks with large
investment firms and high-net-worth individuals about taking on more financing
for his Twitter acquisition and tying up less of his wealth in the deal.
Musk will continue to hold talks with existing shareholders
of Twitter, including the company's former chief Jack Dorsey, to contribute
shares to the proposed acquisition, according to a regulatory filing.
Larry Ellison, a board member at Tesla and a self-described
close friend of Musk, has committed $1 billion for the funding.
Musk, a self-proclaimed free speech absolutist who has
advocated user-friendly tweaks to Twitter, such as an edit button and defeating
"spam bots" that send overwhelming amounts of unwanted tweets, has
previously said he would try to keep as many investors in Twitter as possible.
Investors have been fretting over whether Musk will complete
the Twitter deal.
In April, he decided at the last minute not to take up a
seat on Twitter's board. In 2018, Musk tweeted that there was "funding
secured" for a $72 billion deal to take Tesla private but did not move
ahead with an offer.
Musk would have to pay a $1 billion termination fee to
Twitter if he walked away, and the social media company could also sue him to
complete the deal. © Reuters
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