Elon Musk’s attempt to buy Twitter has been bumpier than a SpaceX flight, and the latest development only adds to the “Will he, won’t he?” saga. After changing his mind – again – about going through with the deal, two key investors have now changed theirs.
According to Reuters, Apollo Global Management Inc and Sixth Street Partners, along with other investors, were committed to more than $1 billion in financing towards the $44 billion deal but have now halted talks with the Tesla CEO.
These talks ended months ago around the time Musk started having second thoughts about the deal, the sources cited above said. Musk initially proposed the buyout in April before backtracking in July and then changing course again this week
The internet was buzzing when Musk announced his intent to purchase the social media app. Some good, some bad, depending on the side of the aisle.
While the left was lamenting the potential end to one of the internet’s last semi-safe spaces for left-leaning and independent news, those on the right were cheering the possible takeover and return of ex-President Donald Trump, permanently banned for violation of Twitter’s terms of service regarding inciting violence after the January 6th attack on the Capitol.
Back in May, Musk said he would open the door for Trump’s return. USA Today reported:
“I would reverse the permanent ban” on Trump, Musk said during a Tuesday interview with The Financial Times, though he pointed out that because the purchase hasn’t gone through yet, Trump’s return is not a fait accompli.
He mentioned his talks with Twitter co-founder and former CEO Jack Dorsey and noted they agree Twitter should not support permanent bans on accounts unless they involve bots or spams and scams.
“Permanent bans fundamentally undermine trust in Twitter as a town square where everyone can voice their opinion,” said Musk of Trump’s ban during the interview. “I think it was a morally bad decision.”
The loss of $1 billion comes at a bad time for the world’s richest man. The South African-born multi-billionaire is facing several civil suits related to his online speculations that caused the stock of both the company he helms and the one he planned to buy, to drop significantly.
A lawsuit was filed by Twitter to hold Musk to the agreed-upon deal of $54.20 a share after the SpaceX CEO attempted to back out, which was just days away when he flip-flopped – again – saying on Tuesday that he was willing to proceed if the social media platform dropped the complaint, per Reuters.
With most of Musk’s network tied to his Tesla shares and limits on how much of it can be leveraged for investments, the lack of cash liquidity means the pulling out of two crucial investors could spell trouble for a deal already on oxygen.
Apollo Global Management, run by co-founder and billionaire Marc Rowan, is a private equity investment firm with over $500 billion in assets under management, and Sixth Street – which manages $60 billion in assets – has an investment portfolio that includes: FC Barcelona, NBA team, the San Antonio Spurs, online travel app Airbnb, and the music streaming service Spotify.
Original reporting by Chibuike Oguh at Reuters.
Follow Ty Ross on Twitter @cooltxchick