The Tesla chief says he will now need to secure $US33.5 billion of equity after allowing a $US6.25 billion commitment from banks to lapse.
| Elon Musk on Wednesday revised the financing plan for his proposed $US44 billion purchase of Twitter, raising investor hopes that the unpredictable billionaire still intends to pull off a deal roiled by market turbulence and his concerns about the number of fake accounts on Twitter.
Mr Musk said his deal to buy Twitter can’t continue until he sees proof of the platform’s bot numbers.The financing changes outlined in a regulatory filing would shave $US6.25 billion from the lending package Mr Musk had previously lined up for the Twitter buyout. That meanswill need to raise that sum in stock commitments instead of debt. That would bring the equity, the stock-based portion of the deal, to $US33.5 billion, up from the $US27.25 billion Mr Musk disclosed three weeks ago.
The nuts and bolts of the financing package weren’t as significant to investors as the news that Mr Musk apparently still plans to complete his Twitter buyout. Serious doubts about Mr Musk’s resolve have hung over the deal since he announced he was putting it “on hold”- something experts say he can’t really do unilaterally - until Twitter provide public proof to support its claims that fewer than 5 per cent of its accounts are fakes powered by spam bots.
Earlier this week, Mr Ives estimated that there was a 60 per cent chance that Mr Musk would call off the Twitter deal and pay a $US1 billion breakup fee, risking a potential lawsuit by the company. With Mr Musk now trying to secure a new financing package, Mr Ives believes there is a 50-50 chance of the deal happening, but only if Twitter’s board is willing to sell for significantly less than the agreed-upon price.
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