Among those involved in these financing commitments are billionaire Oracle co-founder Larry Ellison, Saudi Prince Al-Waleed bin Talal, and Sequoia Capital.
The commitments of 19 investors to help finance the deal come as the Tesla billionaire prepares the capital needed to fund one of the technology’s largest acquisitions.
Musk had originally planned to fund the deal in part through his shares in electric car giant Tesla, which he heads.
Wall Street Journal: Elon Musk plans to make Twitter public again in 3 years
The new financing allows Elon Musk to reduce the size of the loan he intends to obtain against shares to $ 6.25 billion, making the deal less risky for him and his lenders.
Musk is expected to become the interim CEO of Twitter for a few months after the deal is completed, according to CNBC.
Prince Alwaleed bin Talal, chairman of Kingdom Holding Company, announced the largest contribution after agreeing to commit about 35 million shares worth $1.9 billion in Twitter to retain a stake in the company after Musk’s acquisition, according to an amended securities filing Thursday morning.
Ellison has committed $1 billion through his trust, and he owns a large stake in Tesla and a seat on its board.
The filing, on Thursday, showed a list of investors including Binance Holdings, the world’s largest cryptocurrency exchange, Brookfield Asset Management, Fidelity Management and Research, and Qatar Holding.
Zhao Changpeng, founder and CEO of Binance, promised $500 million, saying in a tweet it was a “small contribution to the goal.”
Musk: Twitter will remain free for individuals and with fees for commercial and government use
As the picture becomes clear about the financing, the market is close to completing the deal, as the gap between Twitter’s share price and Musk’s offer of $54.20 per share narrows to its lowest level since April 26.
Twitter shares rose 2.9% to $50.49 in the market opening session. The deal is due to be completed later this year, and the two sides agreed to pay a cancellation fee of around $1 billion in the event it collapses.
The world’s richest person reached an agreement to acquire Twitter on April 25 through a financing plan that has alarmed some Tesla investors.
In addition to his commitment to provide tens of billions of dollars of his Tesla stock to support margin loans, Musk has pledged to raise about $21 billion in equity.
That number rose to $27.25 billion, according to the filing Thursday, and Musk sold more than $8.5 billion of Tesla stock to fund the deal.
“In this risky game, Ellison and this incredible list of supporters will remove a lot of the backlog from Tesla stock now that Musk’s stock is leveraged less expensively,” said Dan Ives, analyst at Wedbush. She’s smart from Musk and everyone will welcome her.”
Alwaleed bin Talal to Elon Musk: I look forward to continuing our $1.9 billion investment in the “new Twitter”
Musk’s newest backer includes traditional asset managers, venture capital firms, small hedge funds, and one of the world’s largest pools of venture capital.
Qatar Holding, the investment arm of Qatar’s sovereign wealth fund, has agreed to commit about $375 million.
Saudi Prince Al-Waleed previously rejected Musk’s offer, saying he had failed to “get close to (Twitter’s) core value.”
Great to connect with you my “new” friend @elonmusk????????
I believe you will be an excellent leader for @Twitter to propel & maximise its great potential@Kingdom_KHC & I look forward to roll our ~$1.9bn in the “new” @Twitter and join you on this exciting journey
– Alwaleed bin Talal (@Alwaleed_Talal) May 5, 2022
Musk is also discussing with Twitter co-founder Jack Dorsey about contributing some of his stock to the acquisition.
Ellison, 77, is the richest member of the group, along with Musk. The software giant has a net worth of about $95.6 billion and is ranked 11th in the Bloomberg Billionaires Index.
Ellison is not an active Twitter user and his last tweet dates back to ten years ago, but his political views are similar to Musk. He is also a major donor to the Republican Party and previously hosted a fundraiser for former President Donald Trump in 2020.
Meanwhile, Mark Andreessen, a vocal anti-Dorsey on Twitter and specialist in Silicon Valley venture capital, has agreed to commit about $400 million through his A16Z fund, Andreessen Horowitz ( A16Z). Sequoia Capital, which specializes in the same field, has committed double the amount to contribute $800 million.
Ben Horowitz, general partner at Andreessen Horowitz, cited the work of Twitter co-founders Evan Williams and Dorsey as a reason to invest in the deal, saying: “We believe in Eve and Jack’s vision to connect the world and believe in Elon’s intelligence to finally get the company where it’s meant to be.”
A number of Tesla investors have also committed to backing Musk’s bid, including Ellison, who owns a 1.45% stake in the electric car maker, and Fidelity Management and Research, which owns about 1%, both of which are Tesla’s largest investors.
Elon Musk’s deal – “Twitter” highlights the dangers of “Tesla” by relying on one man
Smaller investors include the real estate-backed family office, Witkoff Capital, and hedge fund Cartenna Capital, founded by Peter Avellone, former director of Millennium Management.
Musk began raising his stake in “Twitter” since early this year, until it reached more than 9% and became the largest individual shareholder in it. He declined an offer to join Twitter’s board of directors because of restrictions that would have forced him to buy more shares. Instead, he made a formal offer to buy Twitter on April 14, through a financing plan that was not made clear at the time.
Twitter has over 90 million followers, and Musk is one of the most visible and prominent users of the platform.
Musk is known for his vague or sometimes obscure tweets, which he posts at all hours of the day, on everything from cryptocurrency to space travel, or whether Twitter should add an edit button. He also said that his desire to make the platform a major bastion of freedom of expression was the main reason he bought Twitter, which is “essential to a functioning democracy.” He put forward several ideas on Twitter, such as limiting ads, adopting an open source algorithm, and doing more to emphasize the principles of freedom of expression.
New Mask Supporters:
Lawrence J. Ellison Revocable Trust – $1 billion
Sequoia Capital Fund – $800 million
Vway Capital – $700 million
Binance – $500 million
AH Capital Management (A16Z) – $400 million
Qatar Holding – $375 million
Alia Capital Partners – $360 million
Fidelity Management and Research Company – $316.1 million
Brookfield – $250 million
Strauss Capital – $150 million
Bamco (Barron) – $100 million
DFJ Growth IV Partners – $100 million
Utkov Capital – $100 million
Key Wealth Advisor – $30 million
AM Management and Consulting – $25 million
Litani Ventures – $8.5 million
Tracer BLVD402 (Cartina) – $5 million
Honeycomb Asset Management – $5 million