Filing: Elon Musk secures $7.14B for his Twitter bid from Larry Ellison, Binance, Sequoia, a16z, Saudi Prince Alwaleed, Fidelity, and others; Ellison gives $1B

Tesla chief raises $7bn from new investors for takeover of social media platform — Elon Musk has revealed that he has raised $7.14bn … Source: SEC.gov .

Financial Times 2022-05-05

Context & Ripple Effects

Musk had already sold roughly $8.4B of Tesla shares after agreeing to take Twitter private. The new investor group adds outside equity to the bid and, in related filing coverage, cuts the planned margin loan from $12.5B to $6.25B.

The financing did not settle at this first syndicate: later coverage shows Musk adding another $6.25B of equity financing and raising his stated commitment to $33.5B. That makes the initial $7.14B round the opening step in reshaping the takeover's capital stack.

First-order effects

Musk gains $7.14B of equity backing from Ellison, Binance, Sequoia, a16z, Prince Alwaleed, Fidelity and others, reducing the bid's reliance on the originally planned margin loan.
Ellison becomes the largest named contributor in the disclosed group with a $1B commitment, while Twitter's proposed buyer base broadens beyond Musk alone.

Second-order effects

Replacing part of the margin loan with outside equity lowers the financing structure's dependence on debt secured through Musk, following his Tesla share sales after the bid.
The investor syndicate gives Musk a template for bringing in further equity partners, a path he later used to increase his own stated commitment.

Third-order effects

If replicated in other founder-led takeovers, large acquisitions may rely more on syndicated strategic and financial equity to reduce concentrated collateral and margin-loan exposure.
The financing mix shifts influence over a private-platform transaction from a single bidder toward a group of co-investors, even when one buyer remains the public face of the deal.

The trend: Large founder-led takeovers are being structured with broader equity syndicates to reduce reliance on margin loans and personal collateral.

Discussion

@bhorowitz @bhorowitz on x
1/First some news, we are joining Elon Musk's bid for Twitter and investing $400MM into the company.
@markdistef Mark Di Stefano on x
I do wonder what happened between the Saudi Prince rejecting Musk's offer out of hand... to going “sure sign me up for private Musk Twitter”. https://twitter.com/...
@alwaleed_talal @alwaleed_talal on x
@elonmusk ... Great to connect with you my “new” friend @elonmusk🤝🏻 I believe you will be an excellent leader for @Twitter to propel & maximise its great potential @Kingdom_KHC & I look forward to roll our ~$1.9bn in the “new” @Twitter and join you on this exciting journey
@markdistef Mark Di Stefano on x
Elon Musk files new paperwork showing he's got more than $7bn of equity financing to roll into his Twitter purchase... including Binance, some Qatari group and a Saudi billionaire https://www.sec.gov/... https://twitter.com/...
@cz_binance @cz_binance on x
Crypto Twitter https://www.theblockcrypto.com/ ...
@karlbode Karl Bode on x
Elon is more mythological figure than human being at this point only person in the ENTIRE WORLD with the courage to tackle the non-existent problem of conservative twitter censorship https://t.co/JSfD2zxnuV
@carnage4life @carnage4life on x
A16Z is joining in with Elon Musk to buy Twitter along with Binance, Sequoia, Fidelity and Larry Ellison. There is definitely some compelling business case being pitched beyond owning the libs with free speech. Can't wait to see how Twitter changes to make more money. https://twi…
@bhorowitz @bhorowitz on x
2/We invested, because we believe in Ev and Jack's vision to connect the world and we believe in Elon's brilliance to finally make it what it was meant to be.
@bhorowitz @bhorowitz on x
4/Elon is the one person we know and perhaps the only person in the world who has the courage, brilliance, and skills to fix all of these and build the public square that we all hoped for and deserve.
@bhorowitz @bhorowitz on x
3/While Twitter has great promise as a public square, it suffers from a myriad of difficult issues ranging from bots to abuse to censorship. Being a public company solely reliant on an advertising business model exacerbates all of these.
@silvermanjacob Jacob Silverman on x
Binance, the world's biggest exchange, is putting $500m into Twitter. Hopefully that helps the crypto spam become even more finely targeted. https://twitter.com/...
@shaig Shai Goldman on x
Sequoia, a16z, DFJ and Binance are some of the most notable from a VC/tech perspective https://twitter.com/...
@vladsavov Vlad Savov on x
Here's who else is buying Twitter now: Qatar, a16z, Binance, Larry Ellison et al. How it started: World's richest man is buying Twitter and setting speech free. How it's going: World's rich men are buying Twitter and setting it free from public accountability. https://twitter.com…
@patrickw Patrick W. Watson on x
These are investments, not gifts. Either A) Musk convinced them he won't run Twitter into the ground, or B) He gave them other, as yet unknown inducements to compensate for the new risks they will be taking. https://www.wsj.com/...
@ericjackson Eric Jackson on x
Larry Ellison is putting $1B into Twitter. His billion into Tesla worked out.
@thedomino Dominic Chu on x
Larry is the only 10-figure commitment on that list $TWTR $ORCL https://twitter.com/...
@jsphctrl Joseph Cotterill on x
Your favourite stock promoter has halved his margin loan on the buyout of this hellsite, and is offering an equity ticket to the show for as little as $5mn. https://www.sec.gov/...
@macaesbruno @macaesbruno on x
Free speech is assured https://twitter.com/...
@tonyfratto Tony Fratto on x
Well, I have to admit, Qatar and Saudi Arabia do come to mind whenever I think of free speech... https://twitter.com/...
@pekingmike Mike Forsythe on x
Serious question. Do we know who the limited partners are in some of these funds? https://twitter.com/...
@loudmouthjulia Julia Alexander on x
Jokes aside, Ellison backing the bid with $1B isn't surprising considering his place on Tesla's board, or considering that he has Elon's name in his Twitter bio. Clearly a show of faith in His Guy even if the business isn't where it needs to be, and is will be difficult to revamp
@loudmouthjulia Julia Alexander on x
Larry Ellison investing $1B in Elon's financing for the Twitter acquisition, not necessarily that long after trying (?) to own TikTok in the US (?) has really big, “somehow I'll be involved with an app powered by an algorithm that dictates public conversation and culture” energy.…
@dearsarah Sarah Szalavitz on x
Musk secures over $7 billion in funding from (mostly very conservative, very Trumpy) investors including Larry Ellison, Sequoia Capital, Brookfield & Qatar Holdings. https://www.cnbc.com/... It's not clear if Elon Musk has enough cash to buy Twitter https://www.axios.com/...
@muradahmed Murad Ahmed on x
Musk reveals he has raised $7.14bn of funding for his $44bn buyout of Twitter. - Larry Ellison in for $1bn, Sequoia $800mn, VyCapital $700mn, Binance $500mn. - Margin loan cut by half to $6.25bn. Increases total equity commitment to $27.25bn Story in @FT https://www.ft.com/...
@peter_tl Peter Thal Larsen on x
Incidentally @larryellison, who has committed $1bn to Musk's Twitter buyout, sent his only tweet to date almost a decade ago https://twitter.com/...
@sridinats Sridhar Natarajan on x
Critical note in filing: Musk's margin loan commitment for deal cut in half to $6.25 billion. $TSLA $TWTR https://twitter.com/...
@binance @binance on x
Probably nothing. https://twitter.com/...
@danprimack Dan Primack on x
Notably missing from this list: @jack
@firstadopter @firstadopter on x
Larry Ellison, Fido, Binance, Sequoia $TWTR https://www.sec.gov/... https://twitter.com/...
@ivanthek @ivanthek on x
Looks like Elon found some equity investors. $TWTR https://twitter.com/...
@danprimack Dan Primack on x
It's really a kind of sad list, in a way... no one committing more than $1b... no big PE firm signed on.
@danprimack Dan Primack on x
Elon gets some equity partners for Twitter takeover, including DFJ and Sequoia Capital. https://twitter.com/...
@sivavaid @sivavaid on x
Elon finally figured out it's a really crappy job. https://twitter.com/...
@sam_l_shead Sam Shead on x
think he's trying to break the record for being CEO of more companies than anyone else https://www.cnbc.com/...
@mattrosoff Matt Rosoff on x
I'm old enough to remember when investors worried about Twitter not having a full-time CEO.
@alexhern @alexhern on x
what if the problem with Jack Dorsey is that he was just too focused on Twitter https://www.cnbc.com/...
@jyarow Jay Yarow on x
Expectation is that he will be a talent magnet for great engineers. https://twitter.com/...
@petermccormack Peter McCormack on x
Qatar Holding LLC investing alongside @elonmusk... a subsidiary of the Qatar sovereign wealth fund. Hardly the bastions of free speech and human rights. https://twitter.com/...
@parkermolloy Parker Molloy on x
Noted free-speech champions... uh... the Qatari government https://twitter.com/...
@sociogeeks_ @sociogeeks_ on x
“Qatar already has a host of repressive laws, but this new legislation deals another bitter blow to freedom of expression in the country and is a blatant breach of international human rights law,” said Lynn Maalouf, Amnesty's Middle East research director. https://twitter.com/...
@jonrussell Jon Russell on x
Funny to raise free speech and take investment from Qatar which has a “vaguely-worded law which criminalizes a broad range of speech and publishing activities” https://www.amnesty.org/... https://twitter.com/...
@samcarvalho Samuel Carvalho on x
A reminder that someone's net worth does not reflect they have that actual money. It's always tied up in assets and they tend to have very little in actual spending cash (when compared against net worth). https://twitter.com/...
@danprimack Dan Primack on x
@jack Qatar is an interesting choice for a “free speech” platform.
@compound248 @compound248 on x
Elon has reduced his margin loan by half and increased the $TWTR equity check to $27 billion (ahem, as predicted). Coinvestors include: • Prince Alwaleed for $1.9B • Larry Ellison of $ORCL in for $1.0B • Sequoia and Vy Capital in for a combined $1.5B https://twitter.com/...
@garyblack00 Gary Black on x
2/ $TSLA likely to move higher as @elonmusk convinces other large $TWTR holders such as HRH Prince Alsaud (4.3% stake) to roll TWTR shares to private. A new 13D shows Elon has equity commitments of $7.1B from other sources. Elon will reduce the margin loan from $12.5B to $6.25B.

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