Elon Musk Secures Funding for Twitter (TWTR) Bid From 19 Investors

Elon Musk's bid to acquire Twitter, Inc. (TWTR) may have just gotten a step closer to becoming reality. In a May 4 amendment to his previously filed Schedule 13D, Musk revealed that he has put together roughly $7 billion in funding for his takeover efforts from nearly 20 sources. Investors include Silicon Valley luminaries, venture capital funds, and more. The new filing seems to indicate that Musk is making arrangements to move forward with the acquisition of Twitter after the company's board accepted his offer on April 25.

Key Takeaways

  • A May 4 filing with the SEC indicates that Elon Musk has secured about $7 billion in funding support for his Twitter acquisition bid.
  • The funding support comes from venture capital firms, Silicon Valley moguls, and the cryptocurrency exchange Binance, among others.
  • As a result of the financing, Musk plans to halve the amount of the loan he will take out against his shares of Tesla, from $12.5 billion to $6.25 billion.

Who Has Offered Funding?

Musk's filing indicated funding support from 18 entities and totaling about $7 billion. Investors include Larry Ellison, the co-founder of tech giant Oracle Corporation (ORCL); venture capital funds Andreessen Horowitz and Sequoia Capital Fund, among others; and cryptocurrency exchange Binance, led by founder and CEO Changpeng Zhao.

The filing also shows that Saudi Prince al-Waleed bin Talal will retain his stake of roughly 35 million Twitter shares, valued at about $1.9 billion, after Musk buys the company. In a tweet, Prince al-Waleed voiced his support for Musk and the acquisition effort.

Implications for Musk's Acquisition Bid

One major impact of the recent filing on the acquisition bid is that Musk will adjust the amount he borrows against his shares in Tesla, Inc. (TSLA) to finance the effort. Musk had previously planned to include a $12.5 billion loan against his Tesla stake; the filing indicates that it will be reduced by half to $6.25 billion. Musk's original financing package for the deal also included loans from several banks as well as a $21 billion cash contribution.

The filing may also shift public sentiment around the acquisition itself. The price of Tesla stock reflected broad investor uncertainty around Musk's highly publicized takeover efforts in late April, as shares fell by about 20% in a single day. Still, investors may be hesitant: Tesla shares dropped by about 8% in the day following the filing. Twitter shares jumped up by about 5% over the same period.

Where Is Elon Musk Getting the Money to Buy Twitter?

A May 4 filing with the SEC indicates that Elon Musk has secured about $7 billion in financing support from nearly 20 entities. He may supplement this with loans from banks, a cash contribution, and a loan against his shares of Tesla.

Who Is Contributing Money to Elon Musk Buying Twitter?

The May 4 filing indicates that Elon Musk has received commitments from venture capital firms such as Sequoia Capital and Vy Capital, as well as Oracle co-founder Larry Ellison, cryptocurrency exchange Binance, and other sources.

How Much Money Has Elon Musk Raised?

The total contributions indicated in the May 4 filing are roughly $7 billion, although Musk may secure additional funding going forward as well.

Article Sources
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  1. Securities and Exchange Commission. "Amendment No. 6 to Schedule 13D."

  2. Wall Street Journal. "The 19 Investors Backing Elon Musk's Twitter Deal: Here's the List."

  3. New York Times. "Elon Musk Has Brought in New Investors to Fund His Twitter Deal, a Filing Shows."

  4. TradingView. "Price Chart: TSLA."

  5. TradingView. "Price Chart: TWTR."

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