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Twitter rose 5. 5% before trading after Elon Musk pledged to invest more of his own wealth in a purchase.
Tesla’s CEO’s plan now includes an additional $6. 25 billion in equity to fund the proposed $44 billion deal.
Musk will no longer rely on margin loans subsidized through Tesla stock, according to the Wall Street Journal.
Twitter shares rose more than 5% in premarket trading on Thursday after Elon Musk poured more of his own wealth into funding his $44 billion takeover bid.
Musk will provide another $6. 25 billion in equity for the deal, bringing the total to $33. 5 billion from the initial $27. 25 billion, according to an SEC 13D filing Wednesday.
He also said Musk spoke with Twitter shareholders, such as the social media platform’s former chief executive, Jack Dorsey, about the option for them to keep the shares after the proposed acquisition, in order to get more investment for the deal.
Tesla CEO Musk has abandoned his goal of relying on a margin loan rather than his shares in the automaker, the Wall Street Journal reported.
Musk’s renewed commitment to Twitter’s service offering follows an era of uncertainty, in which he said the acquisition was “temporarily suspended. “This came after a corporate registry said less than five percent of the platform’s accounts were spam or fake, anything Musk questioned.
Twitter said in April that it had accepted Musk’s takeover offer, pending regulatory approval from shareholders. The deal is expected to be reached in 2022. The company’s shareholders voted against re-electing a Musk ally, Egon Durban, to the board of directors at an annual meeting on Wednesday. Durban is co-director of the Silver Lake equity company.
Either can withdraw from the settlement for a billion-dollar termination fee. Twitter’s CEO said last week that the company remains committed to enforcing Musk’s merger deal with a $54. 20 offer consistent with the stock.
Twitter is up 5. 7% in the pre-launch to $39. 26, but the stock is down 14% so far this year. Recession risks. Meanwhile, Tesla was down less than 1% before the market at $655. 45, as investors assessed the effect of Musk’s resolution on the stock market. Its price has fallen about 38% this year.
Those losses hurt Musk’s value, which fell below $200 billion, according to the Bloomberg Billionaires Index.
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