Tesla and SpaceX chief executive Elon Musk raised $7.14 billion out of the $44 million bid for Twitter from investors, including Sequoia Capital, an asset management firm Fidelity, crypto exchange Binance, and Andreessen Horowitz, to name a few.
Ben Horowitz, the co-founder of Andreessen Horowitz,
tweeted, “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.”
The founder and chief executive of Binance, Changpeng Zhao,
said that the crypto exchange hopes to “play a role in bringing social media
and web together and broadening the use and adoption of crypto and blockchain
technology.”
With the modified financing arrangements, Elon Musk plans to
augment the equity commitment to $27.25 billion and reduce the margin loans by
half that he had taken from a group of lenders to $6.25 billion. Musk has sold
about $8.5 billion worth of shares to finance the Twitter deal, which has been
a matter of worry for the Tesla investors.
Saudi Prince Alwaleed, one of the main investors of Twitter,
agreed to commit shares worth $1.9 billion to retain a stake in the company
post the takeover.
Musk is getting existing shareholders to roll over their
shares for the acquisition, including Twitter co-founder Jack Dorsey.
Elon Musk has huge tasks ahead of him, with a promise to
increase revenue to cushion the extensive debt. He plans to augment earnings by
increasing subscriptions by awarding the blue tick, a significant step to make
Twitter private to deliver a free speech platform he has promised. And the
major cost-cutting act would be to stop the ads due to the heavy fee and
R&D costs.