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Here’s who helped Elon Musk buy Twitter

Hamza Shaban and Faiz Siddiqui
December 26, 2022 — 11.00am

Elon Musk’s $US44 billion Twitter takeover has so far been marked by turmoil.

After slashing half the company’s 7500 member staff, he’s driven away advertisers and created
a bigger financial hole for the company. So far, his ideas for bringing in additional money -
paying for verification and additional features - have failed to make much of a dent. An
unscientific poll he launched recently told him to step down as CEO.

Elon Musk purchased Twitter in October for $US44 billion ($66 billion). SQUARE INDEX ONLY

On a Twitter audio chat recently, Musk cited the company’s precarious financial position as a
driver of his aggressive job cuts and drastic actions, adding “we have an emergency fire drill on
our hands.”

That’s making at least some of his investors in the deal antsy, according to people familiar with
the matter who spoke on the condition of anonymity for fear of retribution. Last week, at least
a couple of the original investors received letters from a Musk associate soliciting additional
investments, according to two people familiar with the matter, although it was unclear if that
would proceed.
Here’s who initially invested in the deal, and what we know about why:

Foreign Investors
Prince Alwaleed bin Talal al Saud (estimated contribution: $US2 billion)

The Saudi prince agreed in May to convert his shares of Twitter, worth nearly $US2 billion, into
a stake in the company when Musk took it private. A month earlier, he had publicly sparred
with Musk about the company’s worth, but later tweeted that Musk would be an “excellent
leader for Twitter.”

The prince has previously placed winning bets on Apple, Amazon and eBay. But his latest
Silicon Valley investment has drawn scepticism in Washington. President Joe Biden and some
members of Congress have called on officials to examine the role of Saudi Arabia and other
countries in the Twitter deal.

The Qatar Investment Authority ($US375 million)

Known for its investments in companies including Barclays, Credit Suisse and Volkswagen, the
$US450 billion fund has an expansive footprint across the globe, and counts itself among
Musk’s investors, putting up $US375 million toward the deal. The fund is fuelled by Qatar’s
liquefied natural gas exports and helps power the gulf nation’s diplomatic and political
projects.

Musk was spotted with Mansoor Bin Ebrahim Al-Mahmoud, CEO of Qatar Investment
Authority earlier this month at the World Cup final.

Binance
The massive cryptocurrency exchange, Binance, was recently in the news for backing out of its
plans to acquire FTX, a rival exchange co-founded by Sam Bankman-Fried that has since
collapsed. Shortly after Musk’s initial bid for Twitter, Binance contacted him and committed
$US500 million toward the purchase.

The exchange’s executives have said they support Musk’s desire to curb the presence of bots on
the platform. They have also said they see Twitter as an opportunity to research and develop
crypto-related technology and services, including payments and authentication. The crypto
company, founded in China, has no headquarters and has drawn the scrutiny of regulators in
the United States, Britain and Japan.

What they get: As part of the deal, anyone who invested $US250 million or more gets special
access to confidential company information. But giving that privilege to foreign investors is
raising flags with Biden and US officials. Of particular interest is whether that includes access
to personal data about Twitter’s users since several of the entities are entwined with
governments that have a history of cracking down on dissidents on Twitter and other online
platforms.
Venture Capitalists
Andreessen Horowitz (estimated contribution: $US400 million)
One of the most famous venture capital firms in Silicon Valley, this firm has invested in Airbnb,
Lyft and Coinbase. Co-founder Marc Andreessen was one of the people who privately messaged
Musk about the Twitter deal, according to court filings. “If you are considering equity partners,
my growth fund is in for $US250 [million] with no additional work required,” Andreessen wrote.
His firm would go on to give even $US400 million. He has cheered on Musk in recent weeks on
Twitter, particularly during the release of the “Twitter Files,” a string of releases on behaviour
inside the company before the takeover.

The other co-founder, Ben Horowitz, said in several tweets that the venture capital firm
believes in “Elon’s brilliance” to make Twitter “what it was meant to be.” Horowitz went on to
say that Twitter suffers from a range of issues, including censorship. He said that Musk was
“perhaps the only person in the world” who could build the public square people hoped for,
echoing the praise that conservatives have directed toward Musk, who they see as a champion
of free speech.

Sequoia Capital ($US800 million)

Another storied investment firm in the tech world, Sequoia Capital, has backed DoorDash,
Zoom and 23andMe. A partner at the firm, Roelof Botha, has known Musk for decades, and was
hired by him to work on what would become PayPal. Sequoia has also invested in Musk’s other
ventures, SpaceX and the Boring Company. “Elon has succeeded in many different industries,”
Botha said during an interview at a Wall Street Journal conference in October. “He’s an
incredible first-principles thinker.”

What they get: Some of the biggest players in Silicon Valley are now tied to Twitter’s future.
They will expect a major return on their investments, and their influence ensures that they can
throw their weight around. How Musk decides to run the company, who he hires and promotes,
and what features and products he emphasises will reveal the role these investors will play in
the new, private Twitter. But as their messages and public comments suggest, they’re also
trying to get into Musk’s good graces.

Elon’s Buddies
Larry Ellison (estimated contribution: $US1 billion)
Larry Ellison, of Oracle, is one of the richest people in the world.

The co-founder and chairman of the software company Oracle, Larry Ellison is known for his
lavish spending. The tech titan, whom Musk counts as a friend, purchased the Hawaiian island
of Lanai, in 2012. Earlier this year he texted Musk, “Elon, . . . I do think we need another
Twitter.” Ellison would go on to pledge $US1 billion to Musk’s purchase.

The billionaire has cultivated ties with Donald Trump, hosting the president in 2020 at his
estate in California’s Coachella Valley and giving millions to Republican candidates and
committees, according to filings with the Federal Election Commission. After Musk said in
October that he would not reinstate banned accounts until there was a clear process in place
for doing so, he restored Trump’s account after a 52 per cent majority of users in a Twitter poll
he ran voted in favour of the decision.
Jack Dorsey ($US1 billion)

One of the co-founders and former chief executive of the company, Jack Dorsey rolled over his
investment in Twitter to Musk’s new private enterprise, doubling down on his faith in the tech
mogul, to the tune of $US1 billion.

Dorsey, who runs the tech conglomerate Block, was one of several key characters who
encouraged Musk to pursue Twitter, according to private text messages made public through
court documents. In the messages, Dorsey told Musk that he had previously tried to get him to
join the board but was blocked, and later referred to the board as “terrible.”

After Musk oversaw dramatic firings and layoffs at his new company, Dorsey apologised on
Twitter for growing his former company too quickly.

What they get: From political persuasion to regained glory, the wealthy elite in Silicon Valley
have myriad reasons to ally themselves with Musk - and may have some asks of him too. A host
of Musk’s associates now function as a small council of lieutenants, helping to bring Musk’s
vision of a “hardcore” Twitter 2.0 to fruition. Jason Calacanis, a longtime Musk associate who
helped fundraise and cheerlead during the turbulent run-up to the deal, has played an
important role in the company’s transition. And once Musk shifts his focus from Twitter,
there’s also the role of CEO up for grabs.

Banks
Morgan Stanley, Bank of America, Barclays (estimated contribution: $US13 billion)

A collection of several banks – including Morgan Stanley, Bank of America and Barclays – have
lent Musk more than a quarter of the funding, or $US13 billion. After a boom of dealmaking in
2021, coming off the uncertainty of the pandemic, Musk’s buyout presented an enticing
opportunity.

This intimidating debt load and Musk’s optimistic revenue projections present daunting math
for the company. Musk’s platform would need to charge $US44 a month to recoup the
advertising value generated by the top segment of US power users if it relied only on
subscriptions, according to an internal document reviewed by The Washington Post.

What they get: While these banks won’t hold the same type of sway over Twitter, they are a
powerful weight on the billionaire, who will owe roughly $US1 billion in interest a year. Musk
has also at times last year put more than half of his Tesla shares down as collateral on loans,
according to financial filings, worth tens of billions of dollars. But Tesla has slumped roughly
65 per cent this year, highlighting both the risks facing tech companies in a downtrodden
market and the danger of loading a slow-growth company like Twitter with too much debt. The
banks helping to finance his Twitter deal would play a huge role if the company ever goes
under.

The Washington Post’s Laura Stevens and Karly Domb Sadof contributed to this report.