Electric Vehicles

Twitter Buyout in Doubt as Musk Financing Put on Hold

 

Elon Musk’s to-ing and fro-ing on whether to complete his Twitter buyout have cut off his efforts to arrange new financing that would limit his cash contribution to the deal.

The $44 billion Twitter buyout has been put on hold because of the uncertainty surrounding the deal, sources say.

Musk has been threatening to walk away from the deal unless the social media company provides him with data to back up its estimate that false or spam accounts comprise less than 5% of its user base.

This culminated in a letter from Musk’s lawyers to Twitter on Monday warning he may walk away unless more information is forthcoming.

Musk is on the hook to pay $33.5 billion in cash to fund the Twitter buyout after arranging debt financing to cover the rest.

His liquidity is limited given that his wealth, which is pegged by Forbes at $218 billion, is largely tied to the shares of Tesla, the electric car maker he leads.

Musk sold $8.5 billion worth of Tesla shares in April after he signed his Twitter buyout deal, and it is not clear how much cash he has available to meet his obligation.

He has said he raised $7.1 billion from a group of equity co-investors to reduce his contribution. Musk also sought to reduce this exposure further by arranging a risky $12.5 billion margin loan tied to the shares of Tesla, but then scrapped it last month.

Musk has been in discussions to arrange $2 billion to $3 billion in preferred equity financing from a group of private equity firms led by Apollo Global Management that would further reduce his cash contribution.

This is now on hold until there is clarity about the future of the acquisition, a source said.

 

  • Reuters, with additional editing by George Russell

 

 

 

 

READ MORE:

Musk Floats 10% Tesla Staff Cut Plan as Outlook Darkens

Musk Plan for a Million on Mars by 2050 a Delusion – Gizmodo

Elon Musk Hints at Unveiling Tesla Humanoid Robot Prototype

 

George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

Recent Posts

IMF Tips 3.2% Global Growth, Warns China on Property Crisis

IMF chief economist says China’s economy is strained by its property crisis and warns that…

11 mins ago

Nikkei Dips on Profit Taking, Hang Seng Flat Despite Rules Boost

Japan’s impending earning season saw investors rushing to cash in while Hong Kong shares were…

24 mins ago

China’s Theft of Trade Secrets Our No1 Concern: US Patent Chief

The US official said US businesses operating in China regularly complain about insufficient protections and…

17 hours ago

Intel Set to Unveil Reduced-Performance AI Chips for China

The news comes after the US outfit came under fire at the weekend after it…

18 hours ago

US Reviewing Trade Sanctions to Tackle China Supply Chain Threats

White House trade chief Katherine Tai will tell lawmakers the administration is even looking at…

20 hours ago

Baidu Says AI Chatbot ‘Ernie’ Has 200m Users A Day

'Ernie Bot' is China’s most popular chatbot. Baidu earned several hundred million yuan using AI…

22 hours ago