Elon Musk is expected to become Twitter’s interim CEO after completing his $44 billion takeover of the social-media company, according to a person familiar with the matter, as the billionaire nears completion of the transaction.
Tesla shares fell more than 8% on Thursday, as investors worried that Musk’s involvement with Twitter would divert his attention away from running the world’s most valuable electric-car maker.
Twitter shares, on the other hand, extended their gains and were up about 4% at $50.89, close to the deal price of $54.20, as investors bet that the new funding made the deal more likely to close.
Twitter CEO Parag Agrawal, who was appointed in November, is expected to remain in his position until the company is sold to Musk. CNBC first reported on Thursday that Musk intends to take over as interim CEO of Twitter.
Earlier on Thursday, Musk announced a group of high-profile investors, including Oracle co-founder Larry Ellison and Sequoia Capital, who are ready to provide $7.14 billion in funding for his Twitter bid.
Saudi Arabian investor Prince Alwaleed bin Talal, who had previously stated that the deal price was insufficient for him to sell his shares, said Musk would be a “excellent leader” for Twitter and agreed to roll his $1.89 billion stake into the transaction.
“Great to connect with you, my “new” friend @elonmusk… Kingdom Holding Company and I look forward to rolling our $1.9 billion into the “new” Twitter,” Alwaleed tweeted.
Musk increased the financing commitment to $27.25 billion, which includes 19 investor commitments, while reducing a margin loan from Morgan Stanley to $6.25 billion. He has already secured loan commitments totaling $13 billion.
Binance, New York-based real estate tycoon Steven Witkoff’s firm, and DFJ Growth IV Partners, which has investments in the Boring Company, SpaceX, SolarCity, and Tesla, are among the other investors.
“We hope to play a role in bringing social media and web3 together, as well as broadening the use and adoption of crypto and blockchain technology,” said Binance CEO Changpeng Zhao.
According to Reuters, Musk is in talks with large investment firms and high-net-worth individuals about increasing funding for his Twitter acquisition and tying up less of his wealth in the deal.
According to a regulatory filing, Musk will continue to negotiate with existing Twitter shareholders, including the company’s former CEO Jack Dorsey, to contribute shares to the proposed acquisition.
Larry Ellison, a Tesla board member and Musk’s self-described close friend, has committed $1 billion to the funding.
Musk, a self-proclaimed free speech absolutist who has advocated for user-friendly Twitter changes like an edit button and defeating “spam bots” that send massive amounts of unwanted tweets, has previously stated that he would try to keep as many investors in Twitter as possible.
Investors have been concerned about Musk’s ability to complete the Twitter acquisition.
In April, he decided at the last minute not to join Twitter’s board of directors. Musk tweeted in 2018 that “funding has been secured” for a $72 billion deal to take Tesla private, but did not proceed with an offer.
If Musk walked away, he would have to pay a $1 billion termination fee to Twitter, and the social media company could also sue him to complete the deal.