After failing to back out of the deal, Elon Musk closed his $44 billion buyout of Twitter yesterday. The first thing he did after taking ownership of the influential social media platform was firing all the top executives. Musk said he was excited to buy Twitter but admits he and his co-investors are overpaying for it.
Musk pledged $46.5 billion in equity and debt financing for the twitter buyout, which covered the $44 billion price tag and the $2.5 billion closing costs. Needless to say, the agents involved in this sale are getting some huge bonuses this year. Banks, including Morgan Stanley and Bank of America, committed to provide $13 billion in debt financing.
The $33.5 billion of equity included Musk’s 9.6% Twitter stake, which is worth $4 billion, and the $7.1 billion he had secured from equity investors, which includes Larry Ellison of Oracle and Saudi Prince Alwaleed bin Talal. That had left Musk in need for an additional $22.4 billion to cover the equity financing part of the deal.
According to a Reuters, Musk had about $20 billion cash after selling part of his holdings in Tesla through multiple transactions in November and December last year and April and August of this year. He would have needed to raise an additional $2.4 billion to complete the financing.
It was not immediately clear how Musk covered the $2.4 billion gap. Musk was widely expected to sell more Tesla shares in the nine-day window between Tesla’s financial results on Oct. 19 and the Oct. 28 deadline to close the deal. However, a sale has not been notified so far. The remaining funds most likely came from outside capital, or current investors, since no Form 4s were filed this week.