The richest man in the world is in talks with major investment companies and high-net worth individuals to seek more funding, Reuters reported on Monday. Although Musk has an estimated net worth of about $ 245 billion, much of his fortune is held in shares. A Tesla CEO revealed last week that he had sold $ 8.5 billion worth of shares after agreeing to buy Twitter. Additional funding, which could come in the form of preferred or common funds, could reduce Musk’s $ 21 billion cash contribution to the deal, as well as a marginal loan he secured for his shares in Tesla. sources familiar with the matter told Reuters. Banks that agreed last month to provide $ 13 billion in loans based on Twitter activities have refused to offer more debt to buy Musk, given the limited cash flow of the San Francisco-based company, Reuters reported last month. Musk has also pledged some of his shares in Tesla to banks to arrange a $ 12.5 billion margin loan to help finance the deal. It may seek to reduce the size of the margin loan based on new investors’ interest in financing the deal, one source said. Major investors, such as private equity firms, venture capitalists and private equity firms, are in talks with Musk to provide preferred financing for the acquisition, the sources said. Preferential equity would pay a fixed dividend from Twitter, in the same way that a bond or loan pays regular interest, but will be valued at the value of the company’s equity. Apollo Global Management Inc and Ares Management Corp. are among the private equity firms that have been discussing financing, the sources added. Musk is still deciding if he will have partners to work with him to write the equity check required for the deal, sources said. Musk is not seeking more debt for the Twitter deal at this time, the sources added. Musk is also in talks with some of Twitter’s key shareholders about putting their stake in the deal instead of cashing in, one source said. The rolling stock includes the sale of the majority of a company’s shares while maintaining a minority ownership stake. Former Twitter CEO and current board member Jack Dorsey is considering whether to adopt his view, a source added. Major institutional investors, such as Fidelity, are also in talks to overturn their involvement, according to the source. Musk has posted on Twitter that he will try to keep as many investors on Twitter as possible while making the company private. The sources asked for anonymity because the matter is confidential. Musk, Dorsey, Fidelity, Apollo and Ares did not immediately respond to requests for comment. Investors are worried about whether Musk will complete the deal with Twitter, as he has done in the past. In April, he decided at the last minute not to take a seat on Twitter’s board. In 2018, Musk wrote on Twitter that “funding was secured” for a $ 72 billion deal to privatize Tesla, but did not make a bid. Musk would have to pay a $ 1 billion termination fee on Twitter if he left, and the social media company could also sue him to finalize the deal. Shares of Twitter rose 1.2% to $ 49.63 in midday trading in New York on Monday, approaching $ 54.20 per share, as investors interpreted the news of the new funding as a greater certainty for its closing. agreement. On Monday, the social media company said in a statement that fake or unwanted accounts accounted for less than 5% of its daily active users generating revenue in the first quarter. The company had 229 million users who received ads in the first quarter. The revelation came a few days after Musk tweeted that one of his priorities would be to remove “spam bots” from the platform. Twitter said in a statement that it faced several risks until the deal with Musk was concluded, such as whether advertisers would continue to spend on Twitter and “possible uncertainty about our future plans and strategy.” Musk, who calls himself a dictator of free speech, has criticized Twitter’s policies of moderation. He wants Twitter’s algorithm for ranking tweets to be public and opposes giving too much power to the service to advertising companies. Reuters contributed to this report.
