When Elon Musk called out Twitter over lack of free speech in March 2022 and floated the idea of an alternative to the microblogging site, it seemed like one of his erratic social media rants. Little did the world know that he was piling up his stake in Twitter and would make an offer to buy it a month later. After a six-month-long drama, Musk is finally set to take over the social media site, but how exactly is he planning to pay $44 billion for it?
The richest man’s cash pile for acquisition
As the world’s richest man, Musk himself is worth more than $221 billion, and he is already Twitter’s largest single shareholder with a 9 per cent stake worth $3 billion. But to finance his purchase, Musk has pooled together bank loans, his own cash and equity investors which even includes Saudi Prince Waleed Bin Talal, who was firmly against the acquisition. Musk had initially considered using his stake in Tesla to pick up a loan of $12.5 billion for the deal, but then dropped the plan and decided to sell his shares instead.
Here’s how the tech tycoon has plucked funds to add to his kitty for buying Twitter.
Elon Musk's fund for Twitter purchase. |
Seven banks including Morgan Stanley, Barclays and Bank of America have raised $13 billion in debt for Musk’s purchase.
Musk has raised $15.4 billion by selling his shares in Tesla. After bidding for Twitetr, he first sold 5.6 per cent of his Tesla stake for $8.5 billion in April, and then again dumped 7.92 million shares worth $6.9 billion in August.
Musk's stake sale in Tesla. |
Before that he had sold Tesla stocks worth $16.4 billion in November and December 2021, after asking Twitter users if he should trim his stake in the EV firm by 10 per cent.
With proceeds from both stake sales in Tesla, Musk will be contributing $27 billion towards the fund to buy Twitter.
In addition to banks and his own cash, Musk has also pulled in $5.2 billion from equity investors which includes $1 billion from Oracle co-founder Lawrence Ellison, and $1.89 billion from Twitter shares of Saudi Prince Waleed Bin Talal, which he transferred to Musk.
Top investors include Prince Waleed bin Talal and Oracle's co-founder. |
This brings the total to $45.2 billion, and should cover the most talked about acquisition, marred by controversies, salvos fired from both sides and courtroom drama involving revelation of texts exchanged between Musk and former Twitter CEO Parag Agrawal.
