Elon Musk needed a hand to take over Twitter, and ties with crypto industry ended up being useful
According to the most recent SEC report, Elon Musk attracted $7.13 billion in new financing commitments from various investors in order to buy all Twitter shares for around $54 each. The most interesting part of the filing is the contribution from one of the biggest cryptocurrency exchanges in the world, Binance, which provided Musk $500 million in commitment letters.
Essentially, commitment letters are loans provided by co-investors for a specific goal which, in this case, is the full acquisition of Twitter via the purchase of all available shares on the market. Usually, commitment letters are followed by a separate agreement in which the lender highlights the terms on which the borrower will return the investment.
Each equity investor at the table has contributed to the parent prior to or immediately at the merger. But while some investors contributed a specific amount of funds, others committed alternatively by providing their shares of Twitter stock.
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Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud contributed 35 million shares. With a valuation of $54.2 per share, Alsaud’s contribution would be almost $1.9 billion, which makes the a largest contribution of all co-investors.
Elon Musk’s Twitter purchase was one of the biggest events in the financial, crypto and media industries. Back in April, Elon Musk started hinting at a potential purchase of one of the biggest social media platforms in the world as he was constantly expressing frustration with the large number of bots, scammers and other unpleasant personas who negatively impact users’ experience on the platform.