There’s a new development in the Twitter–Elon Musk deal, and this time, it’s a financial one rather than a juicy controversy.
In his latest step, Musk has removed Tesla shares as collateral to secure financing for his acquisition of Twitter.
He declared the expiry of margin loans in a new filing with the Security and Exchanges Commission (SEC).
When Musk first penned the offer to buy Twitter, he committed $21 billion of his own money, and the rest was acquired through loans. He used Tesla shares as collateral to get $12.5 billion as a loan.
Earlier this month, a bunch of investors — including Oracle founder Larry Ellison, venture capital firms a16z, Qatar Holding, and Sequoia Capital, and cryptocurrency exchange Binance — pumped in $7 billion towards the deal.
After securing this money, Musk cut his Tesla shares-backed loan in half to $6.25 billion. But in the latest filing, he’s completely removed this loan in the financing plan to acquire the social media company.
Now, the Tesla CEO is committed to providing $33.5 billion through equity financing. A report by CNBC notes that Musk is talking with Twitter co-founder Jack Dorsey amongst others to provide additional funding.
Musk’s move could be a result of continuously plummeting Tesla stock. The EV maker’s shares have dipped by almost 47% from its all-time high achieved in November 2021.
This news has had a positive impact on Twitter shares though, which are trading at around $39 after hours. But they’re still well below Musk’s offer price of $54.20.
While this stalemate made a lot of people think about the state of the deal, Musk’s latest SEC filing seems like a positive step for his Twitter acquisition.