According to a recent Wall Street Journal report, despite Elon Musk’s plans to take Twitter private, the billionaire Tesla CEO has told potential investors he wants to take the company public again within a few years.
The Wall Street Journal reports that Tesla CEO Elon Musk has agreed to take Twitter private in a deal worth $44 billion, but is already telling potential investors that he could see the company being taken public again after just a few years.
Elon Musk strikes a pose (Pool/Getty)
Musk reportedly plans to stage an IPO for Twitter in as little as three years after purchasing the firm, according to sources. Breitbart News previously reported that Musk has been speaking to investors in an effort to lower the $21 billion of his personal wealth he plans to invest in the deal, with the rest of the money coming from loans.
Musk agreed to pay the $21 billion in cash alongside a margin loan secured against his Tesla shares. The banks involved in the deal agreed last month to provide $13 billion in loans based on Twitter’s business reportedly rejected the idea of offering more debt to Musk for the purchase of the company due to the social media platform’s limited cash flow.
Musk has further pledged Tesla shares to banks in order to secure a $12.5 billion margin loan based on new investor interest in financing the deal. Musk is reportedly in talks with private investors such as equity firms, hedge funds, and high-net-worth individuals in an effort to secure preferred equity financing for the deal.
Preferred equity would pay a fixed dividend from Twitter, similar to how a bond or loan pays regular interest but would appreciate in line with the equity value of Twitter. Among the equity firms speaking to Musk are Apollo Global Management and Ares Management, according to inside sources.
Recently leaked internal communications between Twitter employees reveal that many are panicked and angry about Tesla CEO Elon Musk’s takeover of the company.
It is a known tactic of private-equity firms to take companies private and make changes internally with the aim of taking them public again within five years. According to the Journal, Musk could be sharing a plan to take the company public again to convince investors that he would work quickly to improve the platform and company profitability.
Musk has laid out very few exact details on how he would do this aside from promising to make the platform more transparent and free speech friendly, with less of a focus on moderation. He has previously stated that the does not care if he makes money on the deal.
Read more at the Wall Street Journal here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address lucasnolan@protonmail.com
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