Elon Musk will put up $6 billion to drop Tesla loans from his Twitter deal
After a rough month for Tesla stock, Elon Musk will no longer fund his Twitter purchase by borrowing against his Tesla ownership stake.
In a filing with the Securities and Exchange Commission, Musk announced the expiration of a series of margin loans against Tesla shares, which were included as part of his original financing plan to acquire Twitter. As part of the announcement, Musk committed an additional $6.25 billion in equity financing, bringing his total commitment to $33.5 billion.
Musk’s initial plan to acquire Twitter included a combination of $21 billion in personal equity and $25.5 billion in loans. $12.5 billion of these loans were secured against Musk’s Tesla shares. Musk cut that number in half with an earlier round of equity financing, and has now restructured the deal to remove it entirely.
The move comes in response to mounting pressure on loans and Tesla stocks in general. The car manufacturer’s stock price has fluctuated since Musk announced his takeover plan, losing more than 30 percent of its value over the course of a month.
It’s not clear where the additional $6.25 billion will come from, though a number of equity partners have appeared since Musk first announced his bid. Earlier in May, Musk announced an additional $7 billion in private equity funding, including from Oracle founder Larry Ellison and Qatar’s sovereign wealth fund.
Despite his legal obligation to own Twitter, Musk has been sober about his immediate plans for the deal. On May 13, he stated that the Twitter deal was “on hold” pending further investigation of bot accounts on the platform. Recently, he called on the Securities and Exchange Commission to investigate the platform’s allegations about bot accounts.