Elon Musk personally commits additional $6.25bn to Twitter deal

Social media company's shares jump nearly 6% in after-hours trading following news of the financial disclosure

Elon Musk has personally committed $33.5 billion towards his proposed $44bn acquisition of Twitter. Reuters

Elon Musk, the co-founder and billionaire chief executive of Tesla has secured an additional $6.25 billion in equity financing for his $44bn proposed buyout of microblogging site Twitter.

A new filing with the US Securities and Exchange Commission shows Mr Musk, 50, is now removing a margin loan from Morgan Stanley that he was planning to use to finance the $44bn Twitter deal, making the buyout less risky as it was secured by his Tesla stock.

Tesla's share price has dropped 45 per cent since the start of this year and is down about 40 per cent since Mr Musk first announced his 9.2 per cent stake in Twitter in early April. The company's market value has plunged to $682.52bn as of Wednesday from $1 trillion last October.

Mr Musk has now personally committed a total of $33.5bn to the buyout of Twitter.

Twitter's shares closed about 4 per cent higher at $37.16 at the end of trading in the US on Wednesday, giving the company a market value of $28.4bn. The stock rallied by about 6 per cent in after-hours trading following Mr Musk's disclosure.

Mr Musk had agreed in April to acquire Twitter for $54.20 a share in cash. The microblogging site's share price is down about 13 per cent since the start of this year.

While the deal to buy Twitter is supposed to be finalised by the end of this year, Mr Musk said earlier this month it had been temporarily put on hold pending details on the amount of fake accounts on the social media platform.

He subsequently locked horns publicly with Twitter chief executive Parag Agrawal over the company's estimates of spam accounts and said the deal could not move forward unless the company provided proof that less than 5 per cent of its users were fake.

In a regulatory filing this month, Twitter said false or spam accounts represented fewer than 5 per cent of its monetisable daily active users during the first quarter.

Mr Musk unveils a new all-wheel-drive version of the Model S car in Hawthorne, California, in 2014. Reuters

Tesla and SpaceX founder Elon Musk. Getty Images

Mr Musk with music producer Quincy Jones. AFP

The wealthiest person in the world with a worth of $274.3 billion, Mr Musk was named 'Person of the Year' by 'Time' magazine in 2021. Getty Images

Focus on Mr Musk's taxes grew last year as Tesla achieved a rarefied $1 trillion in market value. Reuters

The billionaire has hit back, saying he does not draw a salary from either SpaceX or Tesla, and pays an effective tax rate of 53 per cent on stock options he exercises. AFP

Then US president Barack Obama speaks to Mr Musk on a tour of Cape Canaveral Air Force Station in Cape Canaveral, Florida, in 2010. Reuters

Mr Musk during a television interview after Tesla's initial public offering at the Nasdaq market in New York, in 2010. Reuters

With former wife Talulah Riley at the 2011 Orange British Academy Film Awards in London. Getty Images

With Japan's former prime minister Shinzo Abe after a test drive of the Tesla Model S P85D in Palo Alto, California, in 2015. Reuters

Mr Musk during the 67th International Astronautics Congress in Guadalajara, Mexico, in 2016. EPA

From left: SpaceX chief executive Elon Musk, Corning chief executive Wendell Weeks, then US president Donald Trump and Johnson & Johnson chief executive Alex Gorsky during a meeting at the White House. AFP

Mr Musk and former wife Grimes at The Metropolitan Museum of Art in New York City, in 2018. AFP

Mr Musk leaves a court in New York City, in 2019, after a hearing in a lawsuit brought against him by the US Securities and Exchange Commission. Getty Images

A prototype of SpaceX's Starship spacecraft is seen before Mr Musk gives an update on the company's Mars rocket Starship in Boca Chica, Texas, in 2019. Reuters

Mr Musk at the construction site of the Tesla Gigafactory in Gruenheide, near Berlin, Germany, last year. EPA

Dancing onstage during a delivery event for Tesla's China-made Model 3 cars in Shanghai. Reuters

Mikey Day as a lawyer, Cecily Strong as a judge, and host Elon Musk as Wario during the "Wario" sketch on NBC's 'Saturday Night Live', in May. Getty Images

Mr Musk with Armin Laschet, CDU party federal chairman and prime minister of Germany's North Rhine-Westphalia, talk during a tour of the plant of the future foundry of the Tesla Gigafactory in Grünheide, near Berlin, Germany. Getty Images

If Mr Musk decides to abandon the agreement, he would have to pay the social media company a $1bn break-up fee.

Mr Musk sold about $8.5bn worth of his shares in Tesla to fund part of his buyout of Twitter. He has secured more than $7.1bn in new equity funding from a group of investors to help finance his acquisition of Twitter.

Eighteen investors have made commitments ranging from $850,000 to $1bn to help Mr Musk finance this deal, according to a previous regulatory filing with the US Securities and Exchange Commission.

Mr Musk has previously said he received equity commitment letters from various investors, including Sequoia Capital, Binance, Litani Ventures, Qatar Holdings, Vy Capital, Key Wealth Advisers, Honeycomb Asset Management and Brookfield.

This also includes a $1bn contribution from Larry Ellison, founder of Texas-based technology company Oracle.

In light of his new disclosure, Mr Musk will now either have to sell more Tesla stock or find additional investors to complete his deal.

In April, Twitter reported a surge in first-quarter net income to $513.3 million, from $68m in the same period in 2021, days after it agreed to be sold to Mr Musk.

The billionaire has said he may take Twitter public again within three years after buying it after he finalises the acquisition, The Wall Street Journal reported, citing sources.