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Breaking: Elon Musk likely to serve as Twitter’s next CEO after deal closes

According to CNBC’s David Faber, Elon Musk is anticipated to serve as a temporary CEO of Twitter for a few months after completing his $44 billion buyouts of the social media business. Musk received around $7.14 billion in stock commitments from friends and other investors to acquire Twitter, according to an SEC filing on Thursday. Musk hand-picked the investors, according to Faber, who range from Oracle co-founder Larry Ellison’s $1 billion to Honeycomb Asset Management’s $5 million investment in SpaceX.

Musk is talking to Twitter co-founder Jack Dorsey about the prospect of donating shares immediately or prior to the merger conclusion, according to Faber. Prince Alwaleed bin Talal, a Saudi Arabian investor, stated on Thursday that billionaire entrepreneur Elon Musk would be a “great leader” for Twitter. “I hope you will be an amazing leader for Twitter to drive and realize its huge potential,” Alwaleed stated in a tweet in response to Kingdom Holding.

He said, “Kingdom Holding Company and I look forward to investing our $1.9 billion in the “new” Twitter and joining you on this exciting adventure.” Elon Musk has received $7.1 billion in additional finance pledges for his planned $44 billion purchase of Twitter Inc., gaining support from some of the world’s most powerful investors. The equity pledges come as the billionaire founder of Tesla Inc. gathers funds to fund one of the largest tech takeovers in history.

Binance, Brookfield Asset Management, Fidelity Management & Research, and Qatar Holding are among the investors identified in the Thursday filing. Larry Ellison, a fellow entrepreneur and co-founder of Oracle Corp., owns a large position in Tesla and sits on its board of directors. Musk’s buyout will be funded with $1 billion from Ellison’s trust.

On April 25, the world’s richest person secured a deal to buy Twitter with a financing scheme that has some Tesla investors concerned. Musk promised to raise $21 billion in equity in addition to committing tens of billions of dollars in Tesla stock to finance margin loans. According to the filing on Thursday, that figure has climbed to $27.25 billion.

The extra stock enables Musk to reduce the size of the margin loan he previously agreed to with a group of investment banks from $12.5 billion to $6.25 billion, lowering the deal’s risk for both Musk and his lenders. In pre-market trading, Twitter shares jumped 2.5 percent.

Saudi Prince Alwaleed bin Talal, chairman of the board of Kingdom Holding Firm and one of Twitter’s biggest investors, has agreed to contribute around 35 million shares in the company, valued at $1.9 billion, in order to keep a position in the company after Musk’s acquisition.

He earlier turned down Musk’s offer, saying it fell “short of the inherent worth of Twitter.” Musk is reportedly in talks with Twitter co-founder Jack Dorsey about donating part of his company’s stock to the deal. Traditional asset managers, venture capital companies, boutique hedge funds, and one of the world’s biggest pools of cash are among Musk’s newest supporters. Qatar Holding, a subsidiary of Qatar’s sovereign wealth fund, has committed $375 million.

Marc Andreessen, a Silicon Valley venture financier who has openly feuded with Dorsey on Twitter, has agreed to invest $400 million via his company A16Z. Sequoia Capital, another venture capital company, is putting up $800 million.

Several Tesla investors, notably Ellison, who holds 1.45 percent of the company’s outstanding shares, and Fidelity Management & Research Co., which owns approximately 1%, have pledged their support for Musk’s Twitter bid. Both are major shareholders in Tesla.

Witkoff Capital, a real estate-backed family office, and Cartenna Capital, a hedge fund founded by Peter Avellone, a former Millennium Management portfolio manager, are among the smaller investors.

“In this high-stakes poker game, Ellison and his remarkable list of supporters will remove more of the overhang from Tesla shares as Musk’s share leverage becomes less onerous,” said Dan Ives, a Wedbush analyst. “Musk made a wise financial and strategic decision that will be favorably accepted by everybody.” It’s unclear how much of that money would come from selling a share in Tesla. To fund the deal, Musk has sold more than $8.5 billion in Tesla stock.

Sources: Reuters, CNBC

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Written by Alex Bruno

Freelance space writer Alex Bruno specializes in covering China's quickly expanding space industry. In 2021, he started writing for SpaceXMania. He also contributes to publications including SpaceNews, IEEE Spectrum, National Geographic, Sky & Telescope, and New Scientist. When Alex was a small child, he first experienced the space bug after seeing Voyager photographs of alien planets in our solar system. When not in space, Alex likes to go trail jogging in the Finnish countryside.

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