Elon Musk commits additional $vi.25 billion in equity financing to Twitter (TWTR) deal
Elon Musk is at it over again, only this time Twitter’s stock isn’t tanking… for once.
Elon Musk has filed an update to his Schedule 13D filing that seems to indicate that he is even so planning on completing the deal. Tesla’s CEO let his Margin Loan Commitment Letter of the alphabet expire earlier this month, and has now stated that he will pony upwardly an additional $vi.25 billion in equity financing.
Here’due south an excerpt from Musk’s Twitter SEC 13D/A filing:
On May 4, 2022, the Reporting Person allowed a portion of the margin loan commitments contemplated by the Margin Loan Commitment Letter to expire, and, after giving event to such expiration, the Margin Loan Commitment Parties remained committed to provide the Margin Loan Borrower with upwards to $half dozen.25 billion in margin loans to fund a portion of the Merger Consideration. Concurrently with the foregoing reduction in margin loan commitments, the Reporting Person committed to provide an additional $6.25 billion in equity financing to fund a portion of the Merger Consideration by alteration and restating the Amended Equity Commitment Letter, dated as of Apr 25, 2022, to increase the aggregate principle amount of the equity commitment thereunder to $27.25 billion.
On May 24, 2022, the Reporting Person allowed the residual of the margin loan commitments contemplated past the Margin Loan Commitment Letter to expire, at which fourth dimension the Margin Loan Delivery Alphabetic character and the commitments thereunder terminated. Meantime with the foregoing, the Reporting Person committed to provide an additional $6.25 billion in equity financing to fund a portion of the Merger Consideration by amending and restating the Amended Equity Commitment Letter of the alphabet, dated as of May 4, 2022, to increase the amass principle amount of the disinterestedness commitment thereunder to $33.5 billion (the “May 24 Equity Delivery Letter”).
The Reporting Person (on behalf of himself and Parent) is seeking and the Reporting Person (directly or indirectly through Parent) may receive additional financing commitments to fund portions of the total Merger Consideration, which commitments, subject to the terms of the Merger Agreement and the May 24 Equity Delivery Letter of the alphabet, may replace portions of the financing commitments previously reported by the Reporting Person in connection with the Merger Understanding and the Merger contemplated thereby, including portions of the Reporting Person’due south May 24 Equity Commitment Letter described herein. In addition, the Reporting Person (on behalf of himself and Parent) is having, and will continue to accept, discussions with certain existing holders of Common Stock (including Jack Dorsey) regarding the possibility of contributing such shares of Common Stock to Parent, at or immediately prior to the closing of the Merger, in order to retain an equity investment in Parent or Twitter post-obit completion of the Merger in lieu of receiving Merger Consideration in the Merger. Field of study to the terms of the Merger Agreement and the May 24 Equity Commitment Letter, whatever such contribution commitments may supersede portions of the financing commitments previously reported past the Reporting Person in connection with the Merger Agreement and the Merger contemplated thereby, including portions of the Reporting Person’s May 24 Equity Commitment Letter described herein.
Every bit of the new update, Musk’s $44 billion deal to acquire Twitter volition exist now be financed with a new commitment of $33.five billion in equity financing, reflecting the $half dozen.25 billion increase from Elon. Tesla shareholders will exist happy to know that the deal no longer will require Musk to use his shares of the EV maker as collateral.
This is also an indication that Musk does intend to get through with the deal despite his concerns well-nigh Twitter’southward disclosure of bot information. Today’south filing likewise provided more than details of Twitter Cofounder Jack Dorsey’southward potential involvement in the bargain.
Twitter (TWTR) shares are up nearly 12% in afterwards-hours trading on the news of this filing, merely the company is certainly beingness held earnest by the billionaire entrepreneur. Go along information technology locked onto Shacknews for more Twitter news every bit it breaks.
This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial counselor before acting on this information.
At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, or his company Virtue LLC had the following positions:
Long Twitter via TWTR shares