As CEO Elon Musk showed in an SEC filing yesterday that he had pledged an additional $6.25 billion for his $44 billion acquisition of Twitter, simultaneously the Tesla leader’s margin loans against his Stakes in the electric carmaker have been reduced. The move relieved pressure that once weighed on Tesla shares, sending shares of the automaker up more than 6%.
A filing yesterday showed Musk had increased his pledge to $33.5 billion, moving closer to a takeover of Twitter. Musk, who also has funding commitments of up to $7 billion, including a $1 billion pledge from Larry Ellison, relieved many Tesla investors with the low-margin loan.
Musk originally took out a $12.5 billion margin loan, but cut it by 50% earlier this month after Ellison and others pledged.
The deal has been complicated at times, especially after Twitter agreed to sell the platform to Musk for $54.20 a share on April 25. freedom of speech.” As Twitter stock cooled from its highs during the Musk-Twitter saga, the Tesla CEO backtracked on the deal, seeking a lower price.
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Twitter’s report that less than 5% of its user population were bots caused Musk to announce the deal was on hold. Seeking a potential discount equivalent to Twitter’s bot concentration, Musk took another step toward locking in the $44 billion purchase, avoidable only with a $1 billion termination fee.
Among the potential shareholders who could add to Musk’s funding commitments are Twitter founder and former CEO Jack Dorsey, who thinks the Tesla CEO might be the best person for the job. Dorsey will not join Twitter’s board after the company’s shareholders’ meeting held yesterday.
Tesla stock has been hammered since the deal was announced in late April. Shares have fallen more than 20% in the past month as the company’s valuation has soared well below its trillion-dollar levels. Musk also took a personal hit, as his net worth fell to less than $200 billion. Thursday saw Tesla’s best morning in recent memory, with shares up more than 6% at 11:49 a.m. in New York. Tesla shares were trading at $700.37 at press time.
Disclosure: Joey Klender is a shareholder of TSLA.
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