New documents show Elon Musk plans to shell out $33.5 billion in his quest to take over Twitter.
Musk is in talks with Twitter founder and former CEO Jack Dorsey and other shareholders to help fund or sell his shares to complete the deal. In a letter to investors backing the holding company Musk is creating to take Twitter private, the Tesla and SpaceX CEO expressed his commitment to completing the deal.
Twitter shares rose more than 5% in the hours following the news, while Tesla shares fell about 1%.
As CNBC’s David Faber previously reported, Elon Musk is expected to serve as Twitter’s interim CEO for several months after it completes its $44 billion acquisition.
The deal has been controversial since Musk first proposed it in April, and shares are trading below the $54.20 acquisition price, suggesting investors had relatively low confidence that the deal would go through at that price.
Earlier in May, Musk sent Twitter shares tumbling when he said he was going to “pause” the $44 billion deal while he investigated the rate of fake and spam accounts on the platform. Musk suggested at the All In Summit technology conference in Miami that his deal with Twitter should be done at a lower price given his concerns about inauthentic activity and accounts on the platform.
In its first-quarter earnings report, Twitter admitted that there were a number of “fake or spam accounts” on the social network, along with legitimate monetizable daily active usage, or users (mDAU). The company wrote in a statement: “We conducted an internal review of a sample of accounts and estimated that the average number of false or spam accounts in the first quarter of 2022 was less than 5% of our mDAUs during the quarter.” Twitter also admitted that it had overstated its user count by 1.4 to 1.9 million users over the past 3 years.
Earlier on Wednesday. Twitter shareholders voted not to re-elect Silver Lake co-CEO Egon Durban to the company’s board of directors. Durban, through Silver Lake, is a long-time business partner and sponsor of Musk’s companies and past business deals.