A new filing reveals that Elon Musk plans to front $33.5 billion in his bid to take over Twitter.
Musk is in talks with Twitter founder and former CEO Jack Dorsey and others to help finance, or roll their shares over, to complete the deal. In a letter to investors backing the holding company that Musk is forming to take Twitter private, the Tesla and SpaceX CEO expressed his commitment to completing the deal.
Shares of Twitter rose more than 5% after hours on the news, while Tesla shares dipped about 1%.
As CNBC’s David Faber previously reported, Elon Musk is expected to serve as a temporary CEO of Twitter for a few months after he completes the $44 billion acquisition.
The deal has been mired in controversy since Musk first proposed it in April, and shares are trading below the $54.20 acquisition price, suggesting investors had relatively low confidence the deal would go through at that price.
Earlier in May, Musk sent Twitter shares tumbling when he said he was going to put the deal worth $44 billion “on hold” while he researches the proportion of fake and spam accounts on the platform. Musk suggested at the All In Summit tech conference in Miami that his Twitter deal should be done at a lower price, potentially, given his concerns about inauthentic activity and accounts on the platform.
In its first-quarter earnings report, Twitter acknowledged there are a number of “false or spam accounts” on the social network, alongside legitimate monetizable daily active usage or users (mDAUs). The company wrote in a filing, “We have performed an internal review of a sample of accounts and estimate that the average of false or spam accounts during the first quarter of 2022 represented fewer than 5% of our mDAU during the quarter.” Twitter also acknowledged that it had overstated user numbers by 1.4 million to 1.9 million users over the past 3 years.
Earlier on Wednesday. Twitter shareholders voted not to re-elect Silver Lake co-CEO Egon Durban to the company’s board. Durban, through Silver Lake, is a long-time business associate and backer of Musk’s companies and past business deals.