Elon Musk has secured $7.1 billion in new funding for his acquisition of Twitter — which CNBC reports will take on the role of “temporary CEO” — with this funding round coming from a group of sometimes high-profile outside investors. Topping the list is Larry Ellison, with Oracle’s co-founder and current CTO pledging $1 billion toward the purchase.
Ellison has said he is “very good friends” with Musk, and he was added to the Tesla board in 2018. As one of the richest people in the world — a superlative he shares with Musk — and an estimated net worth of over $100 billion, the investment is relatively minor change for him. In 2012, Ellison bought almost the entire Hawaiian island of Lanai for about $500 million.
The new list of investors also includes venture capital firm Andreessen Horowitz, financial firm Fidelity, crypto exchange Binance and Qatar’s state investment company.
Saudi Prince Alwaleed bin Talal also agreed to continue investing in Twitter after the deal was closed — despite initially saying Musk’s offer would not “[come] close to the intrinsic value of Twitter” and he says would reject the redemption. As the merger closes, its nearly $1.9 billion stake in Twitter will be converted into an investment in the privately held company.
4/Elon is the only person we know and arguably the only person in the world who has the courage, brilliance and skills to solve all these problems and build the public square we all hoped and deserved.— benahorowitz.eth (@bhorowitz) May 5, 2022
Now the prince tweeted to his “new” friend Elon: “I believe you will be an excellent leader for Twitter to propel and maximize its great potential.” Binance boss Changpeng Zhao told the Financial times that his company’s $500 million buy-in is “more of a blank check” than an investment based on specific plans.
Andreessen Horowitz Co-Founder Ben Horowitz Posted multiple tweets on why his company is investing $400 million, criticizing unspecified incidents of censorship and saying, “we believe in Ev and Jack’s vision to connect the world and we believe in Elon’s genius to finally make it what it was meant to be. ” Horowitz blamed some of the problems that Twitter is a publicly traded company that relies on ads and got co-signed by its former CEO and co-founder Jack Dorsey, who tweeted “this is true. it needs cover for a while.”
Musk reached an agreement with Twitter last week to sell the company for $44 billion. The new funding will allow Musk to spend less of his equity on the deal, which could be important to him because much of that money is tied up in Tesla stock.
The acquisition is expected to close later this year. Musk has so far provided vague and sometimes lofty details of how he will change Twitter, from “authenticating all people” to taking his company out of advertising. Mostly, he says he wants the platform to become a forum for free speech, although it remains unclear what that means in practice.
Musk has also said that buying Twitter is “not a way to make money”. But he would also consider job cuts and ask companies and governments to use the platform.
Update May 5, noon ET: Added statements and tweets from some investors.