Elon Musk receives about $7.1bn in new financing for Twitter

Twitter shares jumped 3.3 per cent in pre-market trading on Thursday after the world’s richest person Elon Musk said he has received more than $7.1 billion in new equity funding to help finance his $44bn acquisition of the social media company. In a regulatory filing to the US Securities and Exchange Commission, Mr Musk said he has received equity commitment letters from various investors, including Sequoia Capital, Binance, Litani Ventures, Qatar Holdings, Vy Capital, Key Wealth Advisors, Honeycomb Asset Management and Brookfield. This also include $1bn contribution from Larry Ellison, founder of Texas-based technology company Oracle. Nearly 18 investors have made commitments ranging between $850,000 and $1bn, according to the SEC filing. Twitter was trading at more than $50 a share in pre-market trading on Thursday. Last month, Twitter entered a definitive agreement to be acquired by an entity wholly-owned by the 50-year-old founder and chief executive of Tesla and rocket company SpaceX , for $54.20 per share in cash. Upon completion of the transaction, Twitter will become a privately held company. In a previous SEC filing , Mr Musk had personally committed $33.5bn to the deal, including $21bn of equity and another $12.5bn coming from margin loans. The latest filing, however, shows Mr Musk’s margin loan amount as reduced to $6.25bn and his financing commitment revised to $27.25bn. Mr Musk will continue to hold discussions with existing shareholders of the San Francisco-based microblogging site, including the company’s founder and former chief executive Jack Dorsey, to contribute shares to the anticipated takeover, the filing showed. “The reporting person [on behalf of parent] is having, and will continue to have, discussions with certain existing holders of common stock [including Jack Dorsey] regarding the possibility of contributing such shares of common stock to parent, at or immediately prior to the closing of the merger, in order to retain an equity investment in Twitter,” it said. Saudi Arabian billionaire investor Prince Alwaleed bin Talal, who had earlier opposed Mr Musk’s buyout attempt, agreed to roll his over 34.9 million shares into the deal, according to the filing. At $54.20 a share, it will be more than $1.89bn stake. Prince Alwaleed, who owns a stake in Twitter through his Kingdom Holding Company, had initially said Mr Musk’s offer did not “come close to the intrinsic value of Twitter given its growth prospects”. Mr Musk’s offer to buy Twitter came after frequent complaints about content censorship and a lack of free speech on the site. In response to a poll he conducted on the platform, 70.4 per cent of users said Twitter does not stick to free speech principles, while 29.6 per cent supported the platform. Following the announcement of his acquisition, Mr Musk tweeted: “I hope that even my worst critics remain on Twitter, because that is what free speech means.” Mr Musk is expected to serve as a temporary chief executive of Twitter for some months after the completion of the deal, CNBC reported, citing sources. Earlier this week, the US Federal Communications Commission said it does not have the right to interfere in the billionaire's acquisition. It said anti-trust regulators should welcome the purchase as it can enhance consumer choice and freedom. Mr Musk may take Twitter public again after he finalises the acquisition to buy the social media company, according to a report by The Wall Street Journal . He may list Twitter as soon as three years after buying it, the media outlet said, citing sources. Although Mr Musk’s deal is still not finalised, he suggested charging corporations and governments to tweet. “Twitter will always be free for casual users, but maybe a slight cost for commercial/government users,” he said in a tweet.

Elon Musk receives about $7.1bn in new financing for Twitter

Nearly 18 investors, including Oracle founder Larry Ellison, have committed investments ranging between $850,000 and $1bn