Elon Musk has decided to reduce his dependence on Tesla stock for the Twitter deal. The billionaire has decided to provide an additional $6.25 billion in equity financing for his $44 billion Twitter takeover. With the latest announcement, his total equity commitment has reached $33.5 billion. Also Read - Twitter’s closed captions feature arrives on Android, iOS: How to use it
Elon Musk, in a fresh filing with the US Securities and Exchange Commission (SEC), announced the expiration of a series of margin loans against the Tesla stock. However, there’s no clarity regarding the source of the additional $6.25 billion that will be raised. Also Read - This EV company has a message to Elon Musk
The EV maker’s stock had nosedived more than 30 percent after Musk announced to fund his Twitter buyout by borrowing against his Tesla ownership stake. However, the stock gained back some value after the latest announcement after the news broke late on Wednesday. Also Read - Twitter’s board recommends $44 billion buyout by Elon Musk even as fixes a few ‘unresolved matters’
The American businessman had originally planned to acquire Twitter by using $21 billion in personal equity and the rest in loans. Out of the $25.5 in loans, around $12.5 billion were planned to be secured via Musk’s shares in Tesla. A previous SEC filing showed that the Tesla CEO has secured nearly $7.14 billion in equity commitments from friends and other investors to acquire Twitter.
The businessman received $1 billion from Oracle co-founder Larry Ellison and $5 million from Honeycomb Asset Management, which invested in his SpaceX company.
The new SEC filing stated, “(Elon Musk has) committed to a increase the aggregate principal amount of the equity commitment there under to $33.5 billion.”
Two weeks ago, Elon Musk put out a tweet saying that the deal is being put on hold. This move came after Twitter shared a report on spam and bots on the platform. The report claimed that less than 5 percent of accounts on the micro-blogging platform are bots. And the prevalence of bots on Twitter was one of the primary motives behind Musk’s Twitter takeover. Both sides plan to execute the deal by the end of this year.