Musk's acquisition of Twitter has made new progress.
Previously, the outside world was worried about Musk's acquisition of Twitter, in addition to antitrust review, as well as Musk's source of funds.
Despite sitting in the position of the world's richest man, musk's wealth comes mostly from his Tesla stock holdings. According to Forbes, in order to raise $12.5 billion of the $44 billion needed to acquire Twitter, Musk needs to pledge $62.5 billion worth of Tesla stock.
In order to buy Twitter, Musk will have to throw a lot of stocks. The resulting possible selling pressure has also brought down Tesla's stock price. On Tuesday, April 26, Tesla shares fell 12 percent, losing more than $128 billion in market value in a matter of hours.
Image source: Value Master Chinese Station
And now, Musk has found a new "White Knight" willing to help buy Twitter financing.
Its May 4 form, filed with the U.S. Securities and Exchange Commission (SEC), shows that 18 companies participated in the financing commitments to acquire Twitter, totaling $7.1 billion. Among them was Lawrence M. J. Ellison's Revocable Trust Fund (Lawrence J. Ellison Revocable Trust), Sequoia Capital (L.P. ), Dubai venture capital firm VyCapital, cryptocurrency exchange Binance, etc.
The biggest investor in the table is Larry Ellison, co-founder of software company Oracle, who contributed a $1 billion funding pledge and joined Tesla's board of directors in December 2018.
The alliance's previous friends were simple, but Musk even persuaded some of the counterparts in the acquisition.
Saudi Prince Alwaleed Bin Talal Abdulaziz Alsaud, who previously opposed the $54.2 offer, promised in the filing that 34,948,975 shares of Twitter worth about $1.7 billion would be retained after the merger, rather than receiving the purchase price in the merger.
Based on limited public information and some speculation, it is possible that Musk will impress the Saudi prince with his promise of "re-listing" of Twitter, after all, his previous reason for opposing the acquisition was that the $54.20 offer was too low. If Musk's "rectification" campaign on Twitter goes well, which can revitalize the platform and raise revenue, there is no need for the Saudi prince to live with money.
Image source: SEC file
Ron Baron, founder of Baron Capital, one of Tesla's major shareholders, told the media on Thursday that "if [the acquisition deal] succeeds, I guess there will be 2-3x or more returns in the next 4-5 years." BAMCO, Inc., a subsidiary of Barron Capital Management, also pledged $100 million to fund the acquisition. Previously, Barron Capital was not optimistic about this business.
Musk's lobbying efforts are still ongoing, and he is also convincing Twitter's existing shareholders, including Twitter co-founder and former CEO Jack Dorsey, to back his privatization proposal and continue to retain his stake. After the funding crisis is further resolved, musk has to face the difficulty of antitrust review. After all, Musk is already the founder and controlling shareholder of several high-tech companies.