Elon Musk on Thursday closed the $44 billion deal introduced in April to take Twitter Inc non-public and took possession of the influential social media platform by firing high executives instantly.
“The hen is freed,” he tweeted in an obvious nod to his want to see the corporate has fewer limits on content material that may be posted. However Musk offered little readability on how he’ll obtain his objectives.
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Earlier this month, Musk introduced the deal again on the desk after beforehand making an attempt to stroll away from it. Musk had stated he was excited to purchase Twitter however he and his co-investors are overpaying.
WHAT WAS HIS FINANCING PLAN?
Musk pledged to offer $46.5 billion in fairness and debt financing for the acquisition, which lined the $44 billion price ticket and the closing prices. Banks, together with Morgan Stanley and Financial institution of America Corp, dedicated to offer $13 billion in debt financing.
Specialists have stated commitments from banks to the deal had been agency and tight, limiting their means to stroll away from the contract regardless of the prospect that they could face main losses.
Musk’s $33.5 billion fairness dedication included his 9.6% Twitter stake, which is value $4 billion, and the $7.1 billion he had secured from fairness buyers, together with Oracle Corp co-founder Larry Ellison and Saudi Prince Alwaleed bin Talal.
That had left Musk in want for an extra $22.4 billion of funds to cowl the fairness financing portion of the deal.
For the reason that co-backers had been revealed, Apollo World Administration Inc and Sixth Avenue Companions have pulled their affords from the desk.
FROM MUSK’S OWN POCKET
Musk, 51, is the world’s richest particular person with a web value of $222 billion, in response to Forbes, however a big portion of his fortune is tied to his stakes in Tesla and Area X.
In line with a Reuters calculation, Musk had about $20 billion money after promoting a part of his stake in Tesla by way of a number of transactions in November and December final yr and April and August.
Musk would have wanted to boost an extra $2 billion to $3 billion to finish the financing for the deal.
WHAT ABOUT THE SHORTFALL?
It was not instantly clear how Musk lined a spot of about $3 billion in financing. Wedbush analyst Daniel Ives stated it could possibly be exterior capital as no Kind 4s had been filed this week and it may doubtless be an investor already backing the deal.
Musk was extensively anticipated to promote extra of his Tesla shares within the nine-day window between the electrical automaker’s outcomes on Oct. 19 and the Oct. 28 deadline to shut the deal. A sale has not been notified thus far.
(Reporting by Hyunjoo Jin in San Francisco, Chibuike Oguh and Kyrstal Hu in New York, Akash Sriram and Yuvraj Malik in Bengaluru; Enhancing by Anirban Sen, Sam Holmes, Nick Zieminski and Arun Koyyur)