Shares of Twitter are sharply higher in after-hours trading in the wake of a new US Securities and Exchange Commission (SEC) filing detailing changes to how Elon Musk is approaching buying the company.
In short, Musk initially indicated that he would execute a margin loan of $12.5 billion against other holdings to help finance his purchase of the social media platform. However, those have lapsed, and, via Twitter, “[c]currently with the before, [Elon Musk has] committed to .. increase the aggregate principle amount of the equity commitment thereunder to $33.5 billion.”
In other words, Musk now plans to front $33.5 billion in his bid to take over Twitter. The Tesla and SpaceX head is in talks with former Twitter CEO Jack Dorsey and others to help finance the deal or roll their shares over, according to CNBC.
In the wake of Musk’s frenetic dealings with Twitter, what appeared to be a push to buy the company became less certain over time. After purchasing a stake in Twitter and nearly joining the company’s board, Musk pivoted to outright acquiring the platform. The transaction was complex, but it set a per-share price on Twitter stock of $54.20, valuing the company at around $44 billion.
Musk then made a number of social media posts either disparaging the company, calling the deal off, and generally causing the market to increasingly value Twitter as if the deal was broken. It is possible vet market confidence in a transaction by how close the company in question trades to its sale price; shares of Twitter rose to the $50 range after the deal was agreed upon, but fell to the $37 mark as the transaction appeared less than certain.
Now with more news that Musk is still working towards the transaction’s financing — though there is nuance to the filing — investors are betting with their wallets that the deal is going to go through. So, up goes Twitter’s share price in the wake of the filing — more than 5% after hours.
That the stock is now merely back to the roughly $39 per-share threshold does indicate, however, some doubt amongst the public market that the SpaceX and Tesla CEO will actually buy the social media company. Beyond general economic headwinds, a dramatic shakeup today saw Dorsey step down from Twitter’s board and Twitter shareholders vote not to re-elect Silver Lake co-CEO Egon Durban to the board. Elsewhere, Twitter agreed to pay $150 million to settle with the US Department of Justice and the Federal Trade Commission in a user privacy case in which law enforcement officials accused the company of mishandling user data over several years.
