May 3, 2022
Tesla boss Elon Musk is in talks with investors to fund his $44 billion takeover of social media giant Twitter.
The new financing could come in the form of preferred shares or common equity, which Musk hopes will reduce the $21 billion in cash he has pledged for the deal, as well as a margin loan he has secured against his Tesla shares.
Musk will not take on any more debt for the Twitter deal, and he is still considering teaming up with partners to write the equity check needed for the deal.
The billionaire is also reportedly in talks with some of Twitter’s major shareholders about the possibility of them rolling their stake instead of cashing out.
According to sources close to the matter, Musk has also pledged some of his Tesla shares to banks to arrange a $12.5 billion margin loan to finance the deal.
Interested investors include private equity firms, hedge funds and high net worth individuals.
The sources made clear that preferred equity would pay a fixed dividend from Twitter, just as a bond or loan would pay regular interest, but this will rise in line with the company’s equity value.
The sources for this piece include an article in Reuters.
