Elon Musk set to become temporary Twitter CEO after takeover


Elon Musk is set to become temporary CEO of Twitter following the close of its $44 billion (roughly Rs. 3,37,465 crore) takeover of the social media firm, a person familiar with the matter said on Thursday, as the billionaire is getting closer to securing funds for the deal.

Musk, the world’s richest man, is also the CEO of Tesla and runs two other companies, The Boring Company and SpaceX.

Tesla shares fell more than 8% on Thursday as investors feared Musk’s involvement with Twitter could distract him from managing the world’s most valuable electric car maker.

Twitter shares, on the other hand, extended gains and rose around 4% to $50.89, closer to the trade price of $54.20 (around Rs 4,150), with investors betting that the new financing made the closing of the transaction more likely.

Parag Agrawal, who was named CEO of Twitter in November, is expected to remain in the role until the company’s sale to Musk is finalized. CNBC announced for the first time on Thursday that Musk plans to become interim CEO of Twitter.

Earlier on Thursday, Musk listed a group of high-profile investors who are ready to provide $7.14 billion (roughly Rs. 54,485 crore) in funding for his offering on Twitter, including the co-founder of ‘Oracle Larry Ellison and Sequoia Capital.

Saudi investor Prince Alwaleed bin Talal, who last month said the deal price was not enough for him to sell his shares, said Musk would be a “great leader” for Twitter and said agreed to roll over his $1.89 billion (about Rs 14,493). crore) participate in the deal.

“Great to connect with you, my ‘new’ friend @elonmusk…Kingdom Holding Company and I can’t wait to launch our ~$1.9 billion on ‘new’ Twitter,” Alwaleed said in a tweet.

Musk increased the funding commitment to $27.25 billion (roughly Rs. 2,08,981 crore), which includes commitments from 19 investors, while cutting a margin loan from Morgan Stanley to $6.25 billion (about Rs. 47,931 crore). It has already secured commitments for $13 billion (about Rs. 99,697 crore) in loans.

Other investors include crypto firm Binance, the company of New York-based real estate magnate Steven Witkoff and DFJ Growth IV Partners, which has investments in Boring Company, SpaceX, SolarCity and Tesla.

“We hope we can play a role in bringing social media and Web3 closer together and expanding the use and adoption of crypto and blockchain technology,” said Binance CEO Changpeng Zhao.

Reuters reported on Monday that Musk was in talks with major investment firms and wealthy individuals to secure more funding for his Twitter acquisition and tie up less of his wealth in the deal.

Musk will continue discussions with existing Twitter shareholders, including the company’s former chief Jack Dorsey, to contribute shares to the proposed acquisition, according to a regulatory filing.

Larry Ellison, a Tesla board member and self-proclaimed close friend of Musk, has committed $1 billion (about Rs 7,667 crore) for the funding.

Musk, a self-proclaimed free speech absolutist who has advocated user-friendly tweaks to Twitter such as an edit button and defeating “spam bots” that send overwhelming amounts of unwanted tweets, has previously said that he would try to keep as many investors in Twitter as possible.

Investors wonder if Musk will complete the Twitter deal.

In April, he decided at the last minute not to serve on Twitter’s board. In 2018, Musk tweeted that there was “funding secured” for a $72 billion (roughly Rs. 42,334,170 crore) deal to take Tesla private, but did not move forward with an offer.

Musk would have to pay a termination fee of $1 billion (around Rs 7,667 crore) to Twitter if he walks away, and the social media company could also sue him to complete the deal.

© Thomson Reuters 2022


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