Elon Musk is set to become Twitter’s interim CEO after completing his $44 billion buyouts of the social-media company, according to a person familiar with the issue, as the billionaire nears completion of the transaction.
Musk is the world’s richest person and the CEO of Tesla Inc, as well as The Boring Company and SpaceX.
Tesla shares fell more than 8% on Thursday, as investors worried that Musk’s participation with Twitter might 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 around 4% at $50.89, close to the transaction price of $54.20, as investors speculated that the extra money made the deal more likely to close.
Twitter CEO Parag Agrawal, who was appointed in November, is anticipated to remain in his position until the firm is sold to Musk. CNBC initially 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 give $7.14 billion in funding for his Twitter bid.
Saudi Arabian investor Prince Alwaleed bin Talal, who had previously stated that the acquisition price was insufficient for him to sell his shares, though Musk would be a “great leader” for Twitter and agreed to roll his $1.89 billion holding into the transaction.
“Great to connect with you, my “new” friend @elonmusk… Kingdom Holding Company and I look forward to rolling out $1.9 billion into the “new” Twitter,” Alwaleed tweeted.
Musk boosted the financial pledge to $27.25 billion, which includes 19 investor commitments while cutting a margin loan from Morgan Stanley to $6.25 billion. He has already received credit commitments totaling $13 billion.
Binance, New York-based real estate mogul Steven Witkoff’s business, and DFJ Growth IV Partners, which includes stakes 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 extending the use and adoption of crypto and blockchain technology,” stated Binance CEO Changpeng Zhao.
According to Reuters, Musk is in negotiations with huge financial groups and high-net-worth people about increasing funding for his Twitter takeover and tying up less of his fortune 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 buddy, has committed $1 billion to the investment.
Musk, a self-proclaimed free speech absolutist who has advocated for user-friendly Twitter changes like an edit button and combating “spambots” that send massive volumes of undesired tweets, has previously stated that he would like to keep as many investors in Twitter as possible.
Investors have been concerned about Musk’s ability to execute the Twitter acquisition.
In April, he opted at the last minute not to join Twitter’s board of directors. Musk tweeted in 2018 that “financing has been secured” for a $72 billion plan 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 finish the transaction.