After a brutal month for Tesla stock, Elon Musk will no longer fund his Twitter buyout by borrowing against his Tesla ownership stake.
In a filing with the US Securities and Exchange Commission, Musk announced the expiration of a series of margin loans against Tesla stock, which had been included as part of his original financing plan to acquire Twitter. As part of the announcement, Musk committed to providing an additional $6.25 billion in equity financing, bringing his total commitment to $33.5 billion.
Tesla has shed more than 30 percent of its value since the Twitter deal was signed
Musk’s initial plan to acquire Twitter involved a combination of $21 billion in personal equity and $25.5 billion in loans. $12.5 billion of those loans was secured against Tesla shares owned by Musk. Musk cut that number in half with an earlier round of equity financing and has now restructured the deal to remove them entirely.
The move comes in response to growing pressure on the loans and Tesla stock generally. The car maker’s share price has cratered since Musk announced his buyout plan, shedding more than 30 percent of its value over the course of a month.
It’s not clear where the additional $6.25 billion will come from, although a number of equity partners have emerged since Musk first announced his bid. Earlier in May, Musk announced an additional $7 billion in private equity funding, including from Oracle founder Larry Ellison and the sovereign wealth fund of Qatar.
Despite having legally committed to taking ownership of Twitter, Musk has been demure about his immediate plans surrounding the deal. On May 13th, he stated that the Twitter deal was “on hold” pending a further investigation of automated accounts on the platform. More recently, he called on the SEC to investigate the platform’s claims about bot accounts.