Elon Musk could soon be forced to dig deeper into his own pockets than he originally planned to shut his acquisition of Twitter — and will now be scrambling to release money, sources tell The Post.
When Musk first offered to purchase Twitter in April, he desired to pony up $10 billion to $15 billion of his own money — a number that features $4 billion in shares he’d already purchased — toward the location’s $44 billion total price tag, The Post reported on the time.
Following his surprise offer on Tuesday to avert a trial by going through with the deal for its original price, Musk could now be on the hook to pony up an extra $19 billion in money at a minimum to complement the debt financing and equity he has arranged to pay the Twitter tab, based on a hedge fund manager tracking Musk’s funds.
The $19 billion money figure assumes that a slate of nearly two dozen co-investors that Musk announced in May stick to their total $7.1 billion in commitments. If any of those co-investors — which include Oracle co-founder Larry Ellison, cryptocurrency exchange Binance and enterprise capital giants Andreessen Horowitz and Sequoia — ditch the deal, Musk will likely be forced to make up the difference by coming up with even additional cash.
Binance spokesperson Jessica Jung told The Post the corporate is “still committed” to putting $500 million into Musk’s bid. Ellison, Andreessen Horowitz and Sequoia didn’t reply to requests for comment.
Elon Musk offered to purchase Twitter for $44 billion. Getty Images
The mogul has raised about $15.5 billion in money from selling Tesla shares in recent months, based on public filings. To lift the additional billions, he could either borrow against the $40 billion of shares he owns and has yet to tap or sell them, analysts say.
While Musk said in August that he didn’t plan to sell any more Tesla stock, the corporate’s shares have dipped about 6% since news broke on Tuesday of Musk’s most up-to-date offer to purchase Twitter.
Musk — who initially desired to be Twitter’s biggest shareholder but own lower than 50% of the corporate — had been hoping to influence private equity firms to affix the bid earlier this yr with a purpose to keep the amount of money he committed closer to $10 billion or $15 billion, sources said. His efforts weren’t successful, based on sources.
One investor who considered partnering with Musk told The Post that he pulled out since the mogul’s growth projections for Twitter were based on conjecture — not solid numbers.
“He thinks he can earn money from doing this or that,” the potential co-investor said. “He doesn’t know.”
“He thinks he can earn money from doing this or that,” one potential Twitter co-investor said of Musk. “He doesn’t know.”Getty Images
Private equity firms Apollo Global and Sixth Street each dropped out of talks with Musk to assist finance the deal, Reuters reported on Thursday.
Twitter is simply prone to request a stay in its lawsuit against Musk if the 2 parties reach an agreement and file it with the Delaware Court of Chancery, based on a source acquainted with the matter.
Even then, the corporate will only fully drop its lawsuit once it has the complete $44 billion within the bank, the source said.
Musk unilaterally requested a stay within the lawsuit in a court filing Thursday afternoon, writing that he expected the deal to shut Oct. 28.
“Twitter is not going to take yes for a solution,” Musk’s lawyers wrote within the filing. “Astonishingly, they’ve insisted on proceeding with this litigation, recklessly putting the deal in danger and gambling with their stockholders’ interests… Proceeding toward trial isn’t only an infinite waste of party and judicial resources, it’ll undermine the power of the parties to shut the transaction.”
Musk’s lawyers on Thursday accused Twitter of “recklessly putting the deal in danger.” AFP via Getty Images
In a response filed Thursday, Twitter wrote in a scathing filing that it opposes Musk’s motion to remain and argued that the deal should close on Monday, Oct. 10.
“Now, on the eve of trial, Defendants declare they intend to shut in spite of everything,” Twitter wrote. “‘Trust us,’ they are saying, ‘we mean it this time,’ and so that they ask to be relieved from a depending on the merits… [but] they refuse to commit to any closing date.”
Musk is barred from selling Tesla shares ahead of the corporate’s Oct. 19 earnings report, raising the likelihood that the Oct. 28 date gives him time to sell Tesla shares, based on analysts.
The newest round of negotiations between Musk and Twitter, which kicked off when Musk sent a suggestion letter late Monday, were still ongoing as of late Thursday, sources near the deal said.
Bloomberg reported Thursday that two points of contention are Musk wanting to order the power to sue individual Twitter executives over his claims he was misled about spam accounts on the location, in addition to a line Musk put in his offer letter saying that he would undergo with the deal “pending receipt of the proceeds of the debt financing.”
Musk has $12.5 billion in debt financing commitments from seven banks led by Morgan Stanley. Analysts following the case say that the banks are almost surely unable to back out of the loans, regardless that they stand to take heavy losses on them.
Musk and Twitter didn’t reply to requests for comment.
