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Elon Musk raises $7bn for Twitter takeover

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elon musk tesla twitter - BRENDAN MCDERMID
elon musk tesla twitter - BRENDAN MCDERMID

Elon Musk has raised $7.1bn of the $44bn he needs to take full control of Twitter, including a $1bn commitment from Oracle’s Larry Ellison.

New filings with the US Securities and Exchange Commission show Mr Musk has the financial backing of Mr Ellison, who is on Tesla’s board, as well as tech investment firm Andreesen Horowitz and cryptocurrency exchange Binance.

Mr Musk’s previous $12.5bn margin loan, secured against his Tesla shares, has been halved to $6.25bn.

Saudi Arabia’s Prince Alwaleed bin Talal, one of Twitter’s largest current shareholders, has also agreed to back the deal if he retains his $1.8bn stake in Twitter.

The prince was an early opponent of the buyout, saying last month he did not believe that Mr Musk’s bid properly valued Twitter “given its growth prospects … I reject this offer”.

He tweeted on Thursday: “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”.

Twitter shares rose more than 2pc in pre-market trading to $50.18.

Dan Ives of Wedbush Securities praised Mr Musk for having made a “smart financial and strategic move”, saying: “This speaks to our thesis that once Musk secured and won the Twitter bid he would seek financing from [private equity] and other players to reduce his burden on the $44bn.”

The buyout of Twitter rests on Mr Musk’s ability to raise enough cash to purchase the San Francisco-based company.

His maximum liability if the deal falls through is $1bn, as revealed in previous regulatory filings - a sum said to be considerably less than any other corporate suitor would face.

Mr Musk also revealed he is in continuing talks with Jack Dorsey, the co-founder of Twitter, about raising finance.

The two have exchanged supportive messages on the social media site itself about changing Twitter's content moderation policies.

Twitter is worth about $39bn, down from March 2021’s high of $62bn.

Previous announcements about Mr Musk’s Tesla margin loan caused the electric carmaker’s share price to slide 12pc.

Tesla shares dipped 0.5pc in pre-market trading to $948.

The electric car revolution could take the shine off Tesla as more and more companies enter the market, Bill Gates has warned.

Experts have been predicting that Tesla shares will triple by 2025, but last week Elon Musk accused the Microsoft co-founder of shorting shares in the electric car maker, which he argued undermined Mr Gates' environmental philanthropy.

However Mr Gates hit back at the accusation, arguing that shorting Tesla was not about climate change but about the electric car boom leading to a more crowded market.

"The popularity of electric cars will lead to more competition for selling those cars. So there's a difference between electric cars being adopted, and companies becoming infinitely valuable," he told BBC Radio 4’s Today programme.

The world's largest companies are throwing money at environmentally friendly motoring following Tesla's success. The company hit a new UK high last month when its Model Y and Model 3 cars were revealed as the country’s top two bestselling new cars.

Amazon, Mercedes and Apple are among those working on their own electric car plans. Uber, however, has dropped plans to build its own driverless car after repeated setbacks to its dreams of having a network of robot taxis.

Charging an electric car remains significantly cheaper than filling up a car with petrol, although the cost of plugging in at public chargers shot up this year.

Mr Gates also told Today he made a “mistake” in spending time with the convicted sex offender Jeffrey Epstein.

"Any meeting I had with him could be viewed as almost condoning his evil behaviour. So, that was a mistake," he said.

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