Elon Musk is abandoning plans to partially fund his Twitter acquisition with a margin loan connected to his Tesla investment, instead of boosting the deal's equity component to $33.5 billion.
According to a regulatory filing Wednesday, Musk would offer an extra $6.25 billion in equity funding for the $44 billion takeovers. That's enough to pay off the same-sized margin debt, which was cut earlier this month.
The new structure might minimize the deal's risk for both Musk and his lenders, especially given Tesla's recent stock price drop. Since Musk originally declared his interest in Twitter in early April, the electric automaker has dropped almost 40%. A prolonged drop increased the likelihood that he would not have enough unpledged shares to satisfy the margin borrowing.
Musk, Tesla's co-founder, is still responsible for the entire $33.5 billion equity component. He can, however, seek assistance from others. According to the most recent filing, Musk is looking for more financial commitments, including negotiations with investors about rolling their shares into the private firm.
Twitter's former CEO, Jack Dorsey, has formally quit the social network's board of directors, thereby terminating his formal association with the business he co-founded in 2006. His departure marks the first time in Twitter's history that none of its co-founders is still employed or on the board of directors.