To The Moon

Elon Musk and Twitter's board reached an agreement to take Twitter private with $44 billion (£34.5 billion). There are more details about the financing of acquisition.

Even if Musk is rich, it's still not easy to take over Twitter by himself. $Tesla Motors(TSLA)$ shareholders panicked that Musk would need to sell more Tesla stock. But Musk has new financing to ease the pressure of pledging Tesla shares to raise money. 

Here's details of his new financing.

Musk's Old and New Partners

In a filing released today by SEC, Musk said he received commitment letters from a number of investment institutions, including Sequoia Capital, for a total of $7.14 billion in financing commitments.

Sequoia Capital Fund, which had previously invested in Musk's company, will invest $800 million this time; while Qatar Holding LLC, an investment organization established by Qatar Investment Authority (QIA), has committed $375 million, and Fidelity Management & Research Company will invest over $316 million.

These institutions investment details are as follows:

Oracle founder Larry Ellison's fund ($1 billion), Sequoia Capital ($800 million), Vy Capital ($700 million), Binance ($500 million), a16z ($400 million), Aliya Capital Partners ($360 million), Fidelity (approximately $320 million), Qatar Holding LLC (375 million), Brookfield (250 million), DFJ (100 million), and Witkoff Capital (100 million).

Among the new investors,

Lawrence J. Ellison Revocable Trust of Oracle co-founder Larry Ellison will put in $1 billion, ranking first.

The second is Binance, the world's largest cryptocurrency trading platform, which will invest $500 million.

• Binance CEO Changpeng Zhao told the Financial Times that Binance will provide almost unconditional support for Musk's acquisition of Twitter. Binance's investment was completed in just over a week, with little discussion of Twitter's plans.

The chart plan also shows that the investors are basically top consortia and capital, and even Crypto player. But even the most funded Lawrence J. Ellison Revocable Trust takes a small position in the whole acquisition case. 

This is precisely Musk's strategy.

• NBC Financial commented that Musk is only partially cooperating with the consortium, which indicates that he is looking for a strategic partner, not just a financial investment partner.

In addition, Saudi Prince Al Waleed bin Talal Al Saud, a major shareholder of Twitter who rejected Musk's offer because it was lower than the intrinsic value of Twitter, has changed his attitude.

He had previously argued that Musk's $54.2 per share bid was "fundamentally inconsistent" with its underlying value, so he will retain 34.95 million shares after the acquisition.

Thursday's filing disclosed that Al Waleed has pledged to buy another 344,889,750 shares of Twitter. That means he will have about $1.7 billion worth of $Twitter(TWTR)$ shares.

Musk also revealed that he is working to bring in more equity investors, including Twitter co-founder Jack Dorsey.

On April 25, about 10 days after launching its poison pill plan, Twitter's board announced it accepted Musk's $44 billion offer. Musk is credited with securing $46.5 billion in financing commitments behind this change in attitude.

Tesla shareholders don't need to worry about Musk's money

To complete the Twitter acquisition deal, Musk had pledged $33.5 billion of his own money. According to the announcement of the acquisition agreement, Musk will get about $13 billion in financing from institutions such as Morgan Stanley; another $12.5 billion will be secured through his Tesla stock. He also committed $21 billion to Twitter, which came from his "direct or indirect" equity holdings.

With this new round of financing, it will greatly reduce the selling pressure on Tesla's stock. According to Reuters, Musk has sold about $8.5 billion of Tesla stock in the past month.

The documents released Thursday mean that the committed equity financing Musk received increased from $21 billion to $27.25 billion; the loan he pledged Tesla stock was able to be reduced from $12.5 billion to $6.25 billion.

Combined with the $13 billion bank loan he previously received, Musk has a total of $46.5 billion to acquire Twitter. The Reuters chart below shows the composition of the new financing of $46.5 billion.

Twitter shares closed last night at $50.30 per share, up 2.65 percent, following news of the new financing. Meanwhile, Tesla shares were down 8% at $873.258 per share.