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Elon Musk pegs more equity commitment to bring down Tesla loans from Twitter deal

Elon Musk pegs more equity commitment to bring down Tesla loans from Twitter deal
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Apropos a month of turmoil for Tesla stock, Elon Musk has increased investments from his personal fund for the Twitter buyout rather than loans against his Tesla ownership stake, according to a filing with the Securities and Exchange Commission. 

The document also laid out that Musk is in conversation with Twitter co-founder and former CEO Jack Dorsey and other stockholders of the microblogging platform who could help out Musk in this takeover by contributing their shares. 

Also read: Musk-Twitter deal: What has happened so far

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Tesla’s share price has been fizzling since Musk announced Twitter’s buyout bid, dropping 30% of its value over the months. 

Musk had put down $46.5 billion in the bid banking on loans and $21 billion from his own equity. Later, he committed to provide another $6.25 billion in equity financing and now he’s committing additional $6.25 billion taking the total commitment to $33.5 billion. 

Musk has recently announced that the Twitter deal is temporarily halted as he awaits details confirming fake accounts and spam are less than 5% on the micro-blogging site. Also, in recent weeks, Twitter fired product, revenue heads as it seeks to become “responsible and efficient”. 

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Meanwhile, on Wednesday, Dorsey stepped down from Twitter’s board of directors. 

When Dorsey stepped down as the CEO of the company back in November last year, a Twitter announcement noted that “Dorsey will remain a member of the Board until his term expires at the 2022 meeting of stockholders.” 

Also, on Wednesday, the US Federal Trade Commission has fined Twitter $150 million over alleged user-privacy violations. The trade commission “charges” Twitter for deceptively using data for targeted advertising. 

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“As the complaint notes, Twitter obtained data from users on the pretext of harnessing it for security purposes but then ended up also using the data to target users with ads,” said FTC Chair Lina M. Khan said in a statement. “This practice affected more than 140 million Twitter users, while boosting Twitter’s primary source of revenue.” 

Also read: Everything about Twitter Bots: The good, bad and ugly

From 2014 to 2019, more than 140 million Twitter users provided their phone numbers or email addresses after the company told them this information would help secure their accounts, according to the complaint. Twitter, however, failed to mention that it also would be used for targeted advertising, the FTC alleged. 

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Twitter has agreed to pay the fine. 

Twitter’s chief privacy officer, Damien Kieran, said in a blogpost, “Keeping data secure and respecting privacy is something we take extremely seriously, and we have cooperated with the FTC every step of the way. In reaching this settlement, we have paid a $150 million penalty, and we have aligned with the agency on operational updates and program enhancements to ensure that people’s personal data remains secure and their privacy is protected.”