Elon Musk Increases His Commitment for Twitter Takeover to $33.5B, TWTR Stock Goes Up

UTC by Darya Rudz · 3 min read
Elon Musk Increases His Commitment for Twitter Takeover to $33.5B, TWTR Stock Goes Up
Photo: Shutterstock

Initially, Musk was committed to paying $27.3 billion in cash for the takeover. Now, as he increased this sum to $33.5 billion, the amount of debt he will have to take on from banks is lower. 

Despite some concerns about Elon Musk taking over Twitter Inc (NYSE: TWTR), Tesla Inc (NASDAQ: TSLA) CEO is still willing to make the acquisition. As the latest filing with the SEC shows, Musk has increased his commitment to the deal to $33.5 billion. Besides, Musk has said he is still looking for more outside investors to help him with the takeover. Currently, he is in talks with Twitter founder and former CEO Jack Dorsey regarding financing and rolling shares of existing stockholders over.

Twitter Takeover by Elon Musk

Musk first announced his intention to buy Twitter on April 25. To finance this $44-billion acquisition, Musk has secured $25 billion of fully committed debt. Furthermore, the billionaire took $12.5 billion by pledging his Tesla stock. By buying the social media company, Elon Musk aims to transform Twitter. In particular, he is planning to take the company private in order to preserve and promote free speech. As Musk explained, having total control of Twitter’s affairs and operations is important to creating a level playing field for right- and left-wing users. Further, within three years, Musk is planning to return Twitter back to public ownership.

Notably, former CEO of Twitter Jack Dorsey is supporting Musk’s intention to improve the platform’s censorship strategies. Dorsey even might help finance the takeover with either a personal investment or by rolling his personal Twitter shares over to help complete the deal.

Initially, Musk was committed to paying $27.3 billion in cash for the takeover. Now, as he increased this sum to $33.5 billion, the amount of debt he will have to take on from banks is lower.

Wall Street’s Concerns

The takeover deal has been surrounded by doubts and skepticism as investors had relatively low confidence that it would go through. The thing is that earlier in May, Musk put the deal on hold, as he was researching the proportion of fake and spam accounts on the platform. Some believed that Elon Musk might choose to walk away from the agreement at a price of $54.20 per share.

Now, as Musk has increased his commitment, investors are betting with their wallets that the deal is going to go through. As the terms of the deal show, if either party wishes to break the agreement, they will pay a $1 billion penalty to the other party.

Twitter Stock’s Recovery

Since the takeover was first announced, the Twitter stock has been declining which shows that investors are worried about the deal with Musk despite the fact that the Board has approved the sale.

Yesterday, after the announcement, TWTR shares jumped. The stock closed in the green, at $37.16 per share. Further, after hours, it added another 5.62% to $39.25.

Twitter’s market cap is $28.397 billion, year-to-date, TWTR stock is 35.76% down.

Business News, Deals News, Market News, News, Social Media
Darya Rudz
Author Darya Rudz

Darya is a crypto enthusiast who strongly believes in the future of blockchain. Being a hospitality professional, she is interested in finding the ways blockchain can change different industries and bring our life to a different level.

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