Elon Musk drops Tesla loans from $44 billion Twitter takeover; Jack Dorsey leaves the board
New Delhi | Jagran Business Office: Elon Musk on Wednesday pledged an additional $6.25 billion in equity funding to fund the $44 billion bid for Twitter Inc, reducing the billionaire’s margin loan against his Tesla Inc stock to zero. in a regulatory filing on Wednesday said Musk was pushing for the deal even though he last week linked his progress to Twitter presenting evidence that spambots made up less than 5% of total users.
While doubting that spambots make up at least 20% of users, the world’s richest man and Tesla’s biggest boss had suggested he might ask for a lower price for the social media company. Musk said Wednesday he was also in talks with shareholders, including Jack Dorsey, for additional funding commitments to fund the deal.
Twitter shares jumped about 6% to $39.15 in extended trading. Musk could not immediately be reached for comment. It initially took out a $12.5 billion margin loan, but earlier this month cut it to $6.25 billion after bringing in co-investors. By April, Musk had lined up $46.5 billion in debt and equity financing to buy Twitter, with Musk himself committing $33.5 billion.
After Musk’s bid, Twitter’s board initially voted to pass a poison pill that limited its ability to increase its stake, but then voted unanimously to accept his takeover offer. Twitter said last week that it was committing to the deal at the agreed price of $54.20. Separately, at an annual shareholder meeting on Wednesday, Twitter investors blocked the re-election of a Musk ally to its board.
Meanwhile, former CEO Jack Dorsey has resigned from Twitter’s board. The announcement was made on Wednesday, the same day Twitter held its annual shareholder meeting, TechCrunch reported.
Dorsey’s exit from the Twitter board marks his complete exit from the microblogging site. The plan for Dorsey to leave the board has been in place since he stepped down as CEO in November 2021 and handed the role to Indian Parag Agrawal.
At that time, the company noted that Dorsey would remain on the board “until his term expires at the 2022 shareholders’ meeting.” News of Dorsey’s departure from Twitter’s board comes at a time when Tesla CEO Elon Musk plans to invest $33.5 billion in his bid to take over Twitter.
(With contributions from agencies)