Elon Musk gets $7 billion in new funding for his Twitter deal


Elon Musk has assembled a group of investors including a Saudi prince, Larry Ellison and a bitcoin exchange to pay out more than $7 billion to back his bid to buy Twitter Inc.

The chief executive of Tesla Inc. received letters committing about $7.14 billion from a group of 19 investors. The biggest contribution comes from Saudi Arabia’s Prince al-Waleed bin Talal, who agreed to keep his nearly $1.9 billion stake in Twitter after Mr Musk’s takeover, according to the disclosure.

The new money will halve the amount Mr. Musk needs to borrow for his Tesla stake and slightly reduce the cash balance he needs to put up personally, to just under $20 billion.

Oracle Corp. co-founder Larry Ellison, who sits on Tesla’s board of directors, has agreed to invest $1 billion. Cryptocurrency exchange Binance.com, controlled by billionaire developer Changpeng Zhao, has pledged $500 million. Other contributors include $850 million from venture capital stalwarts Sequoia Capital. Branches of asset managers Fidelity Investments and Brookfield Asset Management Inc. will also be on hand.

Binance said its involvement was “as a supporter of Elon Musk’s plans for Twitter and as an investor,” a spokesperson said. Mr Zhao tweeted that the investment was “a small contribution to the cause”.

Mr Musk said he was in talks to bring more current Twitter shareholders, including co-founder Jack Dorsey, into the company after the takeover. Mr Musk told potential investors on Twitter that he could put the company back on the public market after a few years of ownership, The Wall Street Journal reported earlier this week.

By assembling a list of big backers, Mr. Musk will effectively reduce the risk he has to take personally to close the $44 billion deal. The richest man in the world, in some ways, Mr. Musk has tapped into an extensive network of associates to join in his schemes.

He said he wanted the social media company to be less censored in moderating content, but otherwise gave few details on his exact plans. At one point, he said he didn’t care about making any money from the deal. Mr. Musk has a habit of missing deadlines and targets at Tesla, the electric car company.

Twitter shares jumped 2% in premarket trading to around $49, closing in on Mr. Musk’s $54.20 per share offering price. The closer the stock gets to the offer price, the more likely investors are to accept the current deal.

Following the new funding commitments, Musk said the $12.5 billion margin loan he received to buy Twitter was reduced to $6.25 billion and the takeover will now be funded by $27.25 billion in equity and cash.

Mr. Musk’s heavy borrowing against his shares has weighed on Tesla shares in recent weeks. The shares were flat in premarket trading.

Other significant backers of the deal include Dubai-based investment firm VyCapital, which is on the hook for $700 million, and venture capital firm Andreessen Horowitz has thrown in $400 million.

Qatar Holding LLC, founded in 2006 by the Qatar Investment Authority, also contributed $375 million and Aliya Capital Partners LLC, led by chief executive Ari Shrage, committed $360 million.

Other new financiers of the deal include familiar faces from Mr Musk’s past. Bamco Inc., founded by prominent Tesla investor Ron Baron, has committed 0 million. Draper Fisher Jurvetson, the former venture capital firm of SpaceX board member Steve Jurvetson, has committed an additional $100 million.

Capital LLC and Witkoff Capital are also funders.

Technology-focused financial adviser Key Wealth Advisors LLC, private equity firm AM Management & Consulting and Chicago-based Litani Ventures, which is the family office of RXBAR founder Peter Rahal, are also participating in the deal.

The other listed companies are Cartenna Capital LP, founded by Peter Avellone, which committed $8.5 million, and Honeycomb Asset Management LP, founded by David Fiszel, which invested $5 million.

—Caitlin Ostroff and Patricia Kowsmann contributed to this article.

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