The other day we reported on Musk's acquisition of Twitter, which was finally voted on by Twitter's board of directors. At the time, he used a high Margin Loan to scrape together about $43 billion in purchase costs.
The margin loan is tied to Tesla stock and carries a high level of risk. Suppose that one day there is a "stock price event" in Tesla stock, that is, the price falls below a predetermined position, then the lender can immediately ask Musk to pay it.
Perhaps to reduce the capital risk of the acquisition and increase the diversification of the pool, Musk recently created a miracle in the field of technology venture capital: in less than two weeks, he raised another $7.1 billion in private equity financing.
According to a 13D filing filed with the U.S. Securities and Exchange Commission (SEC) on May 4, the new round of funding was backed by nearly 20 independent investment institutions and investors:
The biggest seller is Musk's old friend, one of Tesla's major shareholders, Oracle founder Larry Ellison, up to $1 billion. As of 2020, Ellison ranks fifth on america's richest list, with assets of up to $72 billion. Participating in the investment in the new Twitter is about 1.4% of his net worth;
Other investors with the highest capital contributions include Sequoia Fund ($800 million), Saudi fund VyCapital ($700 million), Binance ($500 million), and A16z ($400 million).
Well-known investors who participated in this round of fundraising also include Defengjie, Fidelity, etc.;
Most of the institutions involved in this round of investment have invested in other companies that Musk has worked for, founded or managed. These companies include PayPal, Tesla, SolarCity (now merged with Tesla), SpaceX, The Boring Company, and others.
There are still some unknowns, such as Jack Dorsey, a Twitter co-founder and former CEO who was kicked out of the company but still holds less than 3% of the stock, and has not yet publicly indicated his involvement in the "new Twitter" deal.
Now that new investors have been found, how can Musk ensure that their investments will be profitable?
The only way to get back on an investment is, of course, to exit. For Twitter, the only exit opportunity must be to go public.
That's right: Musk has promised participants in this round of financing that Twitter can be re-listed as soon as three years after the transaction is completed!
(Three years is still too early, and we don't know more details about future re-listings than Musk's private statement.) ）
As for the reason why Musk has already received investment bank loan commitments and is still engaged in private equity financing, speculation may be that the terms of the bank loan are not the most suitable for this high-risk acquisition, but the bank loan wins quickly. So it is very likely that Musk first finds a bank to quickly get money (promises) to convince the Twitter board, and then replaces a part of the capital pool with the investment institutions and individuals who are more familiar with himself through the venture capital model.
In addition to the new $7 billion in private equity, Musk also took out a whopping $8.4 billion in Tesla stock late last month. He said at the time that it was enough to sell so much and would not sell more, so as not to affect Tesla's stock price.
No one is going to fight against the money, right?
Ironically, the Saudi prince, who was previously sought out by Musk for publicly opposing the acquisition, actually participated in this round of investment with joy this time.
Brief summary: When Musk suddenly launched a hostile takeover half a month ago, the Saudi prince Alwaleed Bin Talal, who ran the global investment community, said that he believed that the acquisition was "not in line with the intrinsic value of Twitter" and rejected the deal on the spot.
Musk also directly replied to the question at that time, and did not give face at all. He satirized the saudi prince's real reason for opposing his acquisition, which was against his proposal to reform Twitter's free speech (note: Saudi Arabia is notorious for this). ）
As a result, yesterday, they actually turned into good friends??
The prince even posted his "show of love" for Musk directly under musk's tweet that ridiculed him:
"It's a pleasure to connect with my 'new' friend, Musk, and I'm sure you'll be a great leader in Twitter and maximize the potential of this company." Royal Funds and I will be rolling our $1.9 billion investment in the company into the 'new' Twitter and joining you on this exciting journey. ”
I really don't know if they have done anything to sell their souls in private.
In addition to the Saudi prince, Musk's general attack on Twitter this time also received $375 million in support from Qatar's sovereign fund. (The two countries ranked 119th and 166th, respectively, on a 2022 list by Reporters Without Borders.) )
To be the "interim CEO", the company's employees panicked
Remember when Musk suddenly acquired a 9% stake in Twitter in early April, he also said that this time it was a "passive investment" (that is, pure financial investment, not involved in the company's decision-making). However, this claim was soon dispelled by Musk's invitation to join Twitter's board.
Today, Musk wants to get involved in the claws of Twitter's important decisions and daily operations, and has extended a little further, causing a group of Twitter employees who already have some antipathy towards Musk to feel more panicked.
CNBC reporter David Faber, who has repeatedly accurately exposed the acquisition, revealed yesterday that Musk is not satisfied with acquiring and privatizing Twitter, and after the transaction is completed, he will be the "interim CEO" for a period of time.
According to CNBC, Musk's tenure as Interim CEO of Twitter is expected to last several months. However, there is another rumor that Musk has found a new CEO candidate, but he does not know who this person really is.
But anyway, from this incident, we already know that Musk really has no spectrum in his mouth: he said passive investment, and finally became a total takeover; he said that when he was a temporary CEO for a few months, maybe he would eventually become a full CEO - after all, he is particularly energetic, and now he is the boss of three or even four companies at the same time.
This may mean that the days of Parag Agrawal, Twitter's current CEO, should be short. It is likely that within this year, he will be forced to give up his position. Considering that Agrawal replaced Jack Dorsey, who was kicked out of the company twice at the end of last year, his total time in this position may not even exceed a year...
Not only the current CEO, but also other Twitter employees are also very panicked about Musk's continuous "attacks". The Platformer reported that after the board of directors "surrendered" to Musk last week, employees discussed the matter in a large number of internal Slack channels, and many people "felt that the future was hopeless."
One employee even wrote directly on his Twitter account: Who is going to tell me if I'm going to make a lot of money or get fired?
Agrawal admitted at a plenary session last month: "We don't know what the future direction of the platform will be... These are indeed times of uncertainty. ”(we don't know which direction the platform will go ... This is a period of uncertainty.)
In order to calm everyone's panic, Agrawal promised employees that there would be no layoffs at least in the near future, and hoped that everyone would be able to rest assured.
But to be honest, employees really can't take what Agrawal says seriously right now.
After all, he just said that he would continue to be the CEO of Twitter (until the deal was completed), and Musk on the back foot could not wait to take over the company as CEO. There are also media reports that Musk did say to the investment bank that he would adopt some "more efficient" revenue growth methods, including layoffs.
In the future, what drastic reforms will Musk make to Twitter?
At present, we know the following:
Added a button to edit tweets so that tweets can be modified after they are published
"Open source algorithms" – It is uncertain which algorithms to open source and how to open source them. But an independent team within Twitter has just recently developed a core protocol architecture for decentralized social networks that conform to the Web3 era
Charging large corporations and government users — here he uses the metaphor of "free services because of the decline of Freemasonry" to allude to Twitter's provision of free propaganda tools for the political and business community.
At present, the "legend" story of Musk's malicious acquisition of Twitter continues at a rate of at least one mouthful every week... Silicon Star people will also continue to pay attention to and report on this.
Title image source: Juny/Silicon Star People Modified from the network picture
![Musk won! At $44 billion, Twitter's board obediently accepted the takeover[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)