Elon Musk increased the amount the entrepreneur and his partners contributed directly to the Twitter acquisition to $33.5 billion, further reducing the amount borrowed from banks, an announcement that delighted investors.
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Following the announcement, Bluebird Group’s action rose in after-market trading on Wall Street. Around 22:00 GMT, the stock gained more than 5%.
Tesla’s chief executive, who originally underwrote 25.5 billion loans, cut those loans to $13 billion, according to a document registered by the United States Securities and Exchange Commission (SEC) on Wednesday, greatly easing his financial burden.
At the beginning of May, several of Twitter’s existing shareholders had already agreed to contribute their shares to the transaction and thus remain a minority stake even after the company’s delisting.
Valuing their titles reduced the envelope Elon Musk had to put on the table.
On Wednesday, the SpaceX founder announced it had received new direct commitments that allowed it to further reduce borrowings raised for the acquisition by an additional $6.25 billion.
He did not say whether that amount came in whole or in part from his private fortune or whether other investors had joined him.
The $12.5 billion in loans that were ultimately not needed had worried some analysts because they were loans backed by Tesla securities. In doing so, they established a connection with the automaker that the market disliked.
Since revealing Elon Musk’s involvement in Twitter’s Capital in early April, the group has lived to the rhythm of the case’s many twists and turns.
As of Tuesday, the deal had fallen to $35.40, or 35% less than the price the fiery entrepreneur officially proposed in mid-April and later confirmed by the board.
A shift that Wall Street is interpreting as an illustration of investors’ doubts about the prospects for the takeover’s success.
According to CNBC, Elon Musk is in talks with several people, including co-founder and former CEO Jack Dorsey, to get them to join the project and receive their contribution in either cash or Twitter stock, which could go beyond the borrowed ones reduce amount.