Tesla CEO Elon Musk has increased his commitment for his planned Twitter takeover to $33.5 billion, new filings show.
Musk, who came to terms with Twitter on April 25 to acquire the company for $44 billion, has worked to fund the deal through personal wealth, as well as investments from others. Musk has already received billions of dollars in commitments, including a $1 billion pledge from Larry Ellison.
Musk is now also in talks with founder and former CEO of Twitter Jack Dorsey, who voiced his support for the Tesla CEO improving the platform’s censorship strategies. Dorsey may be planning to help finance Musk’s Twitter takeover with either a personal investment or rolling his personal Twitter shares over to help complete the deal. It was announced today during Twitter’s shareholder meeting that Dorsey would leave the Twitter board.
The filing and news of Musk’s increased stake in the takeover sent Twitter stock up over 9 percent in after-hours trading. Twitter shares closed at $37.16, up 3.86 percent.
TWTR Chart by TradingView
The increased commitment from Musk may clear some minds of any skepticism as some Tesla investors have admitted they would like the CEO to backtrack away from the deal. Terms of the deal show that if either party wishes to remove themselves from the agreement, they will pay a $1 billion penalty to the other party. Some reports have stated that Musk could be subjected to additional litigation from Twitter if he does back out of the deal.
Musk offered $54.20 per share for the social media platform, and the company’s stock shot above $52 per share after Musk’s offer. However, the stock has cooled down significantly since then, which has catalyzed some skepticism from Musk. Analysts, like Dan Ives of Wedbush, who tracks Tesla, believed Musk was attempting to get out of the deal after the CEO stated an inaccurate report of bot accounts on Twitter put the deal “on hold.” Twitter said less than 4 percent of active accounts were bots, while Musk believed the figure was closer to 20 percent.
Twitter acquisition can’t move forward until its bot numbers are ironed out: Elon Musk
Musk aimed to receive a discount equivalent to the concentration of bot accounts, according to a Tweet the CEO responded to on Twitter. Twitter responded stating the deal was not “on hold,” and that it would not renegotiate the $44 billion agreement. With Musk’s most recent filing, it seems he is planning to ultimately fund the deal.
Disclosure: Joey Klender is not a TWTR Shareholder. He is a TSLA Shareholder.