Elon Musk has raised $7 billion from new investors for his $44 billion acquisition of Twitter.
The 19 contributors backing the billionaire’s deal include Oracle co-founder and Tesla board member Larry Ellison, who is pledging $1 billion.
The Qatar state investment fund is putting up $375 million, while Binance, the world’s largest cryptocurrency exchange, is putting up $500 million, according to a regulatory filing.
There has previously been some uncertainty about how MuskCEO of electric car maker Tesla and rocket company SpaceX, would finance the planned purchase.
Although he is the richest person in the world, much of his wealth is tied to the value of Tesla.
He has said he will pay for the deal with a combination of loans, investments and cash.
Musk is expected to use around $8 billion of his recent sale of Tesla sharesas well as $13 billion in bank loans.
He is also borrowing against his Tesla holdings.
Thanks to the new commitment of 7,000 million dollars, it will be able to reduce its debt from 12,500 to 6,250 million dollars, according to a regulatory document.
He later said he would not sell any more shares of Tesla, which has fallen 15% in value in the past month.
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Musk will also become Twitter’s temporary CEO after the deal closes, according to a source familiar with the matter.
He is in talks with others for additional funding, including former Twitter CEO Jack Dorsey.
Dorsey is the tech giant’s second-largest individual shareholder, after Musk.
Saudi investor Prince Alwaleed bin Talal has agreed to put his $1.77 billion share of Twitter into the deal rather than withdraw money, the filing showed.
He said Musk would be an “excellent leader” for the site despite previously being against the purchase.
Sequoia Capital, a Silicon Valley venture capital giant, will provide $800 million, while another $700 million comes from VyCapital, a Dubai-based investment group.
Binance CEO Changpeng Zhao framed his investment as a move towards “Crypto Twitter” and said it was a “small contribution to the cause.”
“We look forward to playing a role in bringing social media and web3 together and expanding the use and adoption of crypto and blockchain technology,” he said.
Tech venture capitalist Ben Horowitz said his firm, known as Andreessen Horowitz or a16z, is investing $400 million because he believes in Musk’s “brilliance to finally make him what he was meant to be.”
“While Twitter holds great promise as a public square, it suffers from a myriad of difficult problems ranging from bots to abuse to censorship,” he said.
“Being a public company that relies solely on an advertising business model exacerbates all of this.”
There has been much speculation about how Musk could change the platform.
He has said a “light cost” could be imposed on governments and commercial entities.
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Why did Elon Musk buy Twitter?
In tweets that have since been deleted, Musk suggested changes to Twitter Blue’s premium subscription service, including drastically lowering its price, banning advertising, and the option to pay in the dogecoin cryptocurrency.
In addition to criticizing Twitter’s alleged restrictions on free speech, he has spoken of wanting new features to improve the user experience while also increasing trust by authenticating all users as human as part of an attempt to crack down on Twitter. spam bots.
Wedbush analyst Dan Ives said the Musk deal had a 75% chance of closing before the new funding, but now has a 90% to 95% chance of success.
He said the new sponsors are a “who’s who” list of Wall Street and Silicon Valley investors and show “that Musk isn’t just trying to change Twitter.”
If Musk were forced to back out of the deal, a $1 billion cancellation fee would be levied on him.