Over the past few days, Elon Musk, the CEO of Tesla and SpaceX, has made a number of promises about what he can achieve with Twitter, including raising user numbers to over half a billion and doubling its revenue with a subscription model by 2025.
He stated that investors who bought into his proposition will profit handsomely while informing them that he would be taking over Twitter as a temporary CEO.
Several leading investors seem to have been convinced by his tall promises. Mr. Musk announced on Thursday that he had already raised $7 billion from 18 organizations to help fund his Twitter bid worth over $44 billion. His Silicon Valley acquaintances, including venture capital firms like Andreessen Horowitz and tech tycoons like Larry Ellison, as well as cryptocurrency companies, family offices, sovereign wealth funds, real estate firms, and mutual-fund companies, were among the investors.
While many traditional private equity companies declined to participate due to concerns about Mr. Musk’s Twitter business goals, others scrambled to participate, according to individuals familiar with the matter. They claimed that their faith in Mr. Musk was the most important factor.
Ben Horowitz, the founder of Andreessen Horowitz, tweeted, “We believe in Elon’s brilliance to finally make it what it was meant to be.”
Mr. Horowitz, whose firm committed $400 million, went on to say that Mr. Musk was “perhaps the only person in the world” with the “courage, brilliance, and skills” to mend Twitter’s problems and “build the public square that we all hoped for and deserve.”
According to a Thursday filing, Oracle co-founder Larry Ellison, who is also a Tesla investor, is the largest investor, with a value at $1 billion. Sequoia Capital contributed $800 million, VyCapital $700 million, Binance $500 million, and Andreessen Horowitz $400 million.
What’s Next for Musk’s Twitter Deal?
The additional investment promises were a sign that Mr. Musk, was still working out his intentions for Twitter ten days after signing a deal to buy the company.
Last month, when the 50-year-old declared his plan to take over Twitte, he seemed unprepared. He didn’t have any funding lined up, didn’t specify who would lead the company, and didn’t explain how it would make money.
He frequently acts on instinct and figures out the details later. As a result, an investor must be varied and make their due diligence before jumping on as investors.
Nonetheless, Elon Musk’s tactics have yielded spectacular results, including making Tesla the most valuable automaker in the world and pioneering the privatization of space missions with SpaceX. This had earned his investors handsomely and made Elon the world’s richest man.
As of writing this piece, Tesla was trading at $873, 8.43% down from its weekly high, and Twiter at $ 50.36, up 3.34% from its weekly lows.
“Many more people have made money betting on Elon than betting against him,” said Mark Pincus, the founder of the social gaming business Zynga and a close friend of Mr. Musk.
Only time will tell what’s in store for all the stakeholders in this deal.