Yahoo Finance Elon Musk Reportedly Seeking More Money To Prop Up Twitter
Amid media accounts that Twitter has stopped paying rent and vendors, representatives of CEO Elon Musk are reaching out for additional investment in the company they are valuing at the same price as the original $44 billion deal, The Wall Street Journal reported Friday.
Musk himself said he was “obviously overpaying” for Twitter at $44 billion. Serious issues with the company since then have likely driven the value down.
Ross Gerber, president and CEO at Gerber Kawasaki Wealth & Investment Management, told the Journal that a representative of Musk contacted him Thursday about offering more shares in Twitter.
Additional equity investments would likely dilute holdings by existing Twitter shareholders, the Journal noted.
Gerber said his company had previously put up less than $1 million to back Musk’s takeover of the company in late October.
Gerber, who is also an investor in Musk’s Tesla, told the newspaper he wasn’t concerned about how Twitter is doing so far — but that he wanted more information.
“I think they just need to be clear with everybody about what’s going on — not just with Twitter, but [with] Tesla” as well, he said.
Tesla investors have complained that Musk’s hyper-engagement in Twitter may be hurting his management of Tesla, whose stock is down more than 57% this year.
Musk earlier this week sold off more than $3.5 billion worth of Tesla stock in his second round of Tesla share sales since buying Twitter.
After a chaotic takeover of the company, Musk said last month that Twitter had suffered “a massive drop in revenue” and was losing $4 million a day. He also raised the possibility of bankruptcy.
The New York Times reported earlier this week that Twitter hasn’t been paying vendors, or rent on its San Francisco headquarters or global offices for weeks. Musk is also considering not paying severance to thousands of Twitter employees he laid off, according to the Times.
