Tesla chief Elon Musk is lately in talks with high-net-worth individuals and investment firms about financing his Twitter acquisition worth $44 billion. This means he would be investing less than what was expected earlier. He is the wealthiest person in the world, as revealed by Forbes, and much of his wealth is in the electric vehicle manufacturing company that he leads. His stake in Tesla is worth $8.5 billion. His total net worth is about $245 billion.
If the new financing goes as planned, it could fulfill his commitment and his cash contribution could reduce the $21 billion cash payment. The financing may come in the form of common or preferred equity. He has simultaneously secured a loan against his Tesla stake. The banks initially agreed to offer $13 billion loans for his Twitter acquisition and later backed by offering more debt.
Meanwhile, Musk pledged a part of his Tesla shares to arrange a margin loan of $12.5 billion to support the deal. He may minimize the margin loan size if investors like hedge funds, high-net-worth individuals and private equity firms, turn up showing interest in financing the deal.
A couple of names emerging are Ares Management Corp and Apollo Global Management. These equity firms are in talks with Musk, showing interest in the financing.
Meanwhile, it is learned Musk is in talks with the major shareholders of Twitter for rolling their stakes in the deal instead of cashing out.
Musk recently tweeted to be keeping as many investors as possible while he takes Twitter private.
Musk had earlier criticized the social media platform's moderation policies. He seeks an algorithm that would prioritize tweets and reduce the same for corporations that advertise.
If Musk walks away from the deal, he may need to pay a termination fee of $1 billion to Twitter.