comscore Elon Musk does not want to spend too much on Twitter deal: Report

Elon Musk does not want to take on more debt for $44 billion Twitter deal: Report

Elon Musk was expected to put in $21 billion in cash for the Twitter deal as well as take a loan against his Tesla shares.


Musk puts Twitter deal on hold

In April, Elon Musk announced he will buy Twitter for $44 billion. The business tycoon plans to buy out all the public shares to take the micro-blogging site private. However, a new report now suggests that Musk may be looking for other investors who would be willing to share the investment burden of the mega acquisition. Also Read - Tesla is on my mind 24/7, says Elon Musk amid concerns over Twitter distraction

A new report from Reuters has claimed that Musk plans to tie up less of his own wealth with the Twitter deal. He is in talks with both large investment firms and high-net-worth individuals to help in financing the deal. Also Read - Elon Musk says Twitter deal ‘cannot move forward’ until it proves bot claims

While Musk is the world’s richest man with a net worth of $245 billion, most of his money is in the form of Tesla shares. He also liquidated $8.5 billion worth of Tesla shares last week, in order to go ahead with the Twitter deal. Also Read - Elon Musk duels with Twitter CEO over expanse of spam and bots on micro-blogging platform

The involvement of more investors will dilute Musk’s shares in the social media platform. The billionaire was expected to put in $21 billion in cash for the deal as well as take a loan against his Tesla shares. The new report suggests that Musk may be planning to reduce his overall investment.

If Musk manages to get in more investors in the deal, he will also be able to reduce the loan size he initially planned to take to fund the deal. Musk had pledged a portion of his Tesla shares to arrange a loan of $12.5 billion. The report suggests that Musk may be planning to reduce the debt he was initially planning to take on to finalise the payment.

The Reuters report also gives us two prospect investors that are in talks with Musk. Apollo Global Management Inc (APO.N) and Ares Management Corp (ARES.N) are among the few private equity firms that may provide Musk with more financing for the deal.

Another way Musk is trying to reduce the overall burden of the deal is by asking Twitter executives to buy into the deal instead of cashing out. One of the people who are yet to take a decision on this will be Jack Dorsey, the former Twitter CEO.

Earlier Musk had clarified via a Tweet that he will try to keep as many investors in Twitter as possible when he takes the company private.

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  • Published Date: May 3, 2022 9:20 AM IST

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