Billionaire has previously said he overpaid company Outreach after weeks of turmoil on Twitter under Musk.
Elon Musk is looking for new investors for Twitter Inc. for $54.20 per share, the same price he paid when he took the company private in October for $44 billion and kicked off a controversial overhaul.
The general manager of the billionaire’s family office, Jared Birchall, has been reaching out to potential lenders this week, news site Semafor reported Friday.
According to SemaphoreElon Musk’s family office general manager is seeking new equity investors for Twitter as users riot, advertisers flee and debt payments loom, according to people familiar with the fundraising.
Jared Birchall, Musk’s asset manager, reached out to potential investors this week and offered shares of Twitter for the same price, $54.20, that Musk paid to take the company private in October, the people said.
“Over the past few weeks, we have received numerous incoming requests to invest in Twitter,” Birchall wrote to investors in an email, which was reviewed by Semafor. “Therefore, we are pleased to announce a follow-on share offering for common stock at the original price and terms, with the goal of a year-end close.”
Ross Gerber, a Tesla investor who said he put less than $1 million into Musk’s original acquisition of Twitter, confirmed that he had been contacted Thursday evening about a new round of funding with a $44 billion valuation.
Gerber said he’s considering it but wants to get a clearer idea of what the plan is. “You could say he created value or destroyed value at Twitter. It’s hard to say at the moment,” he said.
Ross Gerber, who runs Gerber Kawasaki Wealth and Investment Management and participated in the earlier Twitter buyout, confirmed the reach.
Asking investors to pay full price for an asset whose value is rapidly collapsing will be a hard sell. Musk may have ideas to save Twitter and clean up social media, but he’s running out of runway to do it.
Twitter took on $13 billion in debt to close the deal, which will generate annual interest payments of about $1 billion. That’s more money than it brought in last year — and that was before advertisers, turned off by Musk’s almost-anything-goes approach to content review, fled the platform.
Musk himself looks tighter financially. He sold another $3.6 billion in Tesla stock on Wednesday, presumably to put more equity into Twitter to lower debt. It was the third time he sold Tesla stock since he said he was done in April.
But Musk’s financiers are overwhelmingly irrational economically, driven more by fandom or shared ideology than financial returns.
“This is going to work, isn’t it,” Bloomberg’s Matt Levine, who has written some of the smartest versions of the Twitter drama, tweeted today. The basic bet here, he notes, is that there are equity investors who will pay 100 cents a dollar for shares of private Twitter because they love Musk. Meanwhile, his bankers are saddled with debt they can’t sell, even at deep discounts, because no one buys bonds for fun.
