By Laura Sanchez
Investing.com – Elon Musk is changing his plans for financing the purchase of Twitter (NYSE:). Now, the mogul plans to lean more heavily on the stock to fund his $44 billion deal to buy the social network, amid a steep decline in Tesla (NASDAQ:) shares in recent weeks.
Mr. Musk’s funding plan now includes $33.5 billion in equity, up from $27.25 billion previously, according to a filing with the U.S. Securities and Exchange Commission (SEC).
Mr Musk therefore no longer plans to use a margin loan backed by Tesla shares, which have fallen by about a third since he struck a deal with Twitter in late April.
By early May, Mr. Musk had raised approximately $7.14 billion from 19 investors, whose stake effectively reduces the personal risk that Mr. Musk must take to complete the Twitter takeover deal, amounting to $44. billions of dollars.
The revelation came shortly after Twitter’s chief executive told shareholders on Wednesday that the company was working on the deal, after Mr Musk previously said the deal was “temporarily on hold”.
“We are working on this transaction process,” CEO Parag Agrawal said at Twitter’s annual shareholder meeting. “While we work to close this transaction, our teams and I remain focused on the important work we do every day,” MarketWatch echoes.
The company deferred questions from shareholders about the deal, saying it planned a later meeting where they could vote on the deal reached last month.
Farewell, Jack Dorsey
Twitter co-founder Jack Dorsey is stepping down from the social media platform’s board, just weeks after playing a key role in selling the company to Elon Musk.
The departure was planned. Twitter originally announced in November that Dorsey would step down from the board when his term expires at the company’s 2022 shareholder meeting. The meeting took place yesterday, Wednesday.
This means that all Twitter founders have now severed official ties with the company.
Twitter and Tesla up in pre-open Wall Street.