Elon Musk seeks additional funding for Twitter

Elon Musk’s team has been exploring potential new investments for Twitter Inc. at the same price as the original $44 billion deal, according to a shareholder who said he was contacted about the proposal.

Ross Gerber, president and CEO of Gerber Kawasaki Wealth & Investment Management, said a representative for Mr. Musk contacted him Thursday about the offering of more shares.

Mr. Gerber said his firm previously committed less than $1 million to support Mr. Musk’s acquisition of Twitter, which closed in late October at a price of $54.20 per share.

Semafor had previously reported to investors about the new range.

Elon Musk has warned of major financial challenges for Twitter, the social media company he acquired for $44 billion in October. WSJ’s Mark Maurer explains how the company is trying to put its finances in order and avoid possible bankruptcy. Photo illustration: Laura Kammermann

Twitter did not immediately respond to a request for comment.

Additional stock investments would likely dilute existing Twitter shareholders. The potential level of dilution from the recent fundraiser could not be immediately determined.

Mr Musk sold more than $3.5 billion worth of Tesla this week inc

TSLA -4.72%

Floor. It was his second round of sales since buying Twitter Inc. Mr Musk sold nearly 22 million Tesla shares over a three-day period ending Dec. 14, according to a regulatory disclosure released Wednesday.

Mr. Musk’s ownership of Twitter got off to a tumultuous start. Last month, Mr. Musk said Twitter has suffered “a massive drop in revenue” and is losing $4 million a day. He later raised the specter of bankruptcy.

As part of the acquisition, Twitter took on around $13 billion in debt. That could leave the social media company owing more than $1 billion in annual interest payments, analysts have estimated, compared to around $51 million in 2021.

Mr. Musk’s focus on Twitter has irritated some Tesla investors as the company is heading for its worst annual stock price performance ever.

Mr Gerber said he was studying the proposal but had some questions about how Twitter would be operated. These include how long Mr Musk intended to serve as chief executive and any transition plan, he added.

Last month, Mr Musk said he expected to find someone else for Twitter, without giving a specific timeline for the appointment.

Ever since Elon Musk took over, Twitter has been in turmoil. To get a feel for what’s going on behind the scenes, The Wall Street Journal spoke to former Tesla and SpaceX employees to better understand how Musk runs companies. Figure: Ryan Trefes

Mr Gerber, who is also an investor in Mr Musk-led electric carmaker Tesla Inc, said he wasn’t concerned about how Twitter is doing so far but said he would like more communication. “I think they just have to make it clear to everyone what’s going on. Not just with Twitter, but with Tesla,” he said.

Several Tesla investors, including Mr. Gerber, have recently expressed frustration that Mr. Musk’s involvement in Twitter could be to the automaker’s detriment. Tesla stock is down more than 57% this year.

Mr Musk tweeted on Friday that “Tesla is performing better than ever” and that earlier that day he checked production progress at the company’s Texas plant.

Write to Alexa Corse at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the print edition December 17, 2022 as Musk Seeks Seeks Additional Funds for Twitter.

Leave a Reply

Your email address will not be published. Required fields are marked *