Twitter buyout: Larry Ellison bursts into Elon's office, slaps $1b down on the desk
With funding from database billionaire, will Oracle-style licensing follow? $50k per like? $1m for 420-character limit?
Elon Musk has bagged $7.14 billion in funding from Oracle billionaire co-founder Larry Ellison, cryptocurrency exchange Binance, and Qatar's sovereign wealth fund, as well as top VC firm Sequioa and others, in his quest to acquire Twitter.
The world's richest man may be worth around $250 billion on paper, but he still needs a little more help from investors to secure enough money to take over the bird-themed microblogging site. The Twitter board last month accepted Musk's offer to take the biz private at $54.20 per share, a $44 billion deal in effect. The SpaceX supremo promised to secure $21 billion himself while the remaining $25.5 billion will be footed by Morgan Stanley, Bank of America, Barclays, and others via debt financing.
Musk sold $8.4 billion of his own Tesla shares last week, causing its share price to temporarily dip by 12 percent. Now, he's cobbled together another $7.1 billion from 18 investors, ranging from VC firms and asset managers to private wealth funds and a cryptocurrency exchange, according to an SEC filing Thursday.
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The top three investors are Larry Ellison's Lawrence J. Ellison Revocable Trust, the Oracle co-founder's private equity fund, which has pledged $1 billion; Sequoia Capital, which is down for $800 million; and Vy Capital, which is investing $700 million. Musk said he received equity commitment letters from each investor on May 4. Database tycoon Ellison is said to be worth about $100 billion.
In addition, Musk has made a deal with existing Twitter investor, Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud, who has agreed not to dump his Twitter stock. The Saudi royal billionaire initially disparaged the deal but today said he and Musk were pals now, and he was keeping his Twitter holdings in place.
Great to connect with you my "new" friend @elonmusk🤝🏻I believe you will be an excellent leader for @Twitter to propel & maximise its great potential@Kingdom_KHC & I look forward to roll our ~$1.9bn in the "new" @Twitter and join you on this exciting journey
— الوليد بن طلال (@Alwaleed_Talal) May 5, 2022
Elon has talked often about his desire to ensure Twitter is a haven of free speech for all. Given in Saudi Arabia a social media post criticizing the Quran can get you five years behind bars and 1,000 lashes, we're sure the internet loudmouth and his chum Prince Alwaleed will have plenty to discuss on their exciting journey to create this new Twitter.
Musk's bid to takeover Twitter isn't a done deal, since it needs to be approved by shareholders and regulators. Still, he is already thinking of ways to shake up the company's structure and management as well as which features to add and new ways to monetize tweets.
Rumor has it Musk wants to sack CEO Parag Agrawal, who is expected to stay until the deal is finalized. It sounds as though the automaker billionaire may not have the perfect replacement in mind, however, and will therefore serve as temporary CEO until the right person comes along, CNBC reported. "Once the deal closes, we don't know which direction the platform will go," Agrawal reportedly told staff at a company-wide meeting last month.
Musk previously said he wanted to roll out a cryptocurrency payments system, and for Twitter to rely less on advertising to make money, which may also mean organizations and governments paying to use the site. He also wants the platform's direct messaging service to support end-to-end encryption, and be less strict in content moderation. All this will be done in mind with trying to reportedly take Twitter public within three years. ®