Elon Musk secures funding from Sequoia, Binance to back Twitter bid
Sequoia, Binance, and Fidelity back Elon Musk by investing $7.14 billion out of the $44 billion bid to acquire Twitter
By Shashank Bhardwaj
Image: JIM WATSON / AFP
Tesla and SpaceX chief executive Elon Musk raised $7.14 billion out of the $44 million bid for Twitter from investors, including Sequoia Capital, an asset management firm Fidelity, crypto exchange Binance, and Andreessen Horowitz, to name a few.
Ben Horowitz, the co-founder of Andreessen Horowitz, tweeted, “Elon is the one person we know and perhaps the only person in the world who has the courage, brilliance, and skills to fix all of these and build the public square that we all hoped for and deserve.”
The founder and chief executive of Binance, Changpeng Zhao, said that the crypto exchange hopes to “play a role in bringing social media and web together and broadening the use and adoption of crypto and blockchain technology.”
With the modified financing arrangements, Elon Musk plans to augment the equity commitment to $27.25 billion and reduce the margin loans by half that he had taken from a group of lenders to $6.25 billion. Musk has sold about $8.5 billion worth of shares to finance the Twitter deal, which has been a matter of worry for the Tesla investors.
Saudi Prince Alwaleed, one of the main investors of Twitter, agreed to commit shares worth $1.9 billion to retain a stake in the company post the takeover.
Musk is getting existing shareholders to roll over their shares for the acquisition, including Twitter co-founder Jack Dorsey.
Elon Musk has huge tasks ahead of him, with a promise to increase revenue to cushion the extensive debt. He plans to augment earnings by increasing subscriptions by awarding the blue tick, a significant step to make Twitter private to deliver a free speech platform he has promised. And the major cost-cutting act would be to stop the ads due to the heavy fee and R&D costs.
Shashank is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash