Elon Musk, Tesla CEO, revised the financing plan for his proposed purchase of Twitter @ $44 billion. He raises investor hopes that the unpredictable billionaire will continue to have the intention to carry out a deal in which market turmoil has rocked. Musk’s not entirely explainable concerns about the number of fake Twitter accounts.
The news overshadowed the annual shareholder meeting of Twitter on Wednesday. Shareholders did not directly address the deal with Musk, which will schedule the vote for an as-yet-undetermined future date, should the deal go ahead. Shares of Twitter rose 5.5% to $39.22 in after-hours trading, after a 3.9% rise in regular trading.
The funding changes outlined in a regulatory filing would reduce the loan package Musk had prepared for the Twitter purchase by $6.25 billion. Musk will have to move up that sum in equity commitments rather than in debt. Thus, the capital part of the agreement supported by shares would rise to 33.5 billion dollars. If we compared the same to the 27.25 billion dollars, Musk revealed that three weeks before.
Documentation filed with the US SEC does not detail where Musk will get the additional capital. However, he stressed that he is still trying to persuade his friend and former Twitter CEO Jack Dorsey, a purchase supporter, to put up the money in its shares for the financing package.
According to FactSet Research, Dorsey, also a co-founder of Twitter, owns a 2.4% stake that is currently worth about $700 million, based on the company’s share price as of close on Wednesday level. Musk owns a nearly 9.6% stake, worth $2.7 billion.
And also the last day of Dorsey as a member of the board of directors of Twitter, a date set when he stepped down as CEO in November of the previous year.