Musk pledges more equity to fund deal on Twitter, cancels margin loan

Elon Musk arrives at the Met Gala In America: An Anthology of Fashion at the Metropolitan Museum of Art in New York, New York, U.S., May 2, 2022. REUTERS/Andrew Kelly/Files

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May 25 (Reuters) – Elon Musk on Wednesday pledged an additional $6.25 billion in equity funding to fund the $44 billion bid for Twitter Inc (TWTR.N), cutting the billionaire’s margin loan against its Tesla Inc (TSLA.O) shares to zero.

The disclosure in a regulatory filing on Wednesday said Musk was pushing hard to get the deal done even though he last week linked his progress to Twitter presenting evidence that spam bots made up less than 5% of the total number of users. users.

While doubting spambots make up at least 20% of users, the world’s richest man and Tesla boss had suggested he might charge a lower price for the social media company. Read more

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Musk said Wednesday he was also in talks with shareholders, including Jack Dorsey, for additional funding commitments to fund the deal.

Twitter shares jumped around 6% to $39.15 in extended trading. Musk could not immediately be reached for comment.

It initially took out a $12.5 billion margin loan, but earlier this month cut it to $6.25 billion after bringing in co-investors.

By April, Musk had lined up $46.5 billion in debt and equity financing to buy Twitter, with Musk himself committing $33.5 billion. Read more

After Musk’s bid, Twitter’s board initially voted to pass a poison pill that limited its ability to increase its stake, but then voted unanimously to accept his takeover offer.

Twitter said last week that it had committed to closing the deal at the agreed price of $54.20. Separately, at an annual shareholder meeting on Wednesday, Twitter investors blocked the re-election of a Musk ally to its board. Read more

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Reporting by Eva Mathews and Richard Rohan Francis in Bengaluru; Editing by Arun Koyyur

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