Elon Musk lays out funding for ambitious Twitter takeover

Illustration by Kristen Radtke / The Verge; Getty Images

Musk has lined up funding for his proposed takeover. In a new filing with the US Securities and Exchange Commission on Thursday, Musk laid out his plan for the $46.5 billion worth of loans that will allow him to finance the buyout offer made on April 14th.

The funding is provided through two debt commitment letters from Morgan Stanley Senior Funding, in which the bank commits to offering a series of loans worth $25.5 billion. The rest of the money will be covered by Musk.

The filing doesn't list any partners who would share the cash burden with Musk. The CEO of the electric car maker has a 9 percent stake in the micro-blogging site.

The filing states that the Reporting Person is trying to negotiate a definitive agreement for the acquisition of the company.

There has been a lot of skepticism about how Musk would finance his offer. Despite being Earth's richest human, with a personal fortune that is thought to be around $249 billion, Musk isn't able to simply buy a company that he doesn't own. The New York Times notes that there are limits to how much stock he is able to use as a security, and that the stock's fluctuations might make banks wary.

Potential investors are hesitant about investing in Musk because of the controversy surrounding the CEO. The New York Times noted that the inconsistent financial performance of the company meant it was not an obvious contender for a traditional leveraged buyout. Musk has said that buying Twitter is not a way to make money, which undermines anyone looking to maximize returns.

Taking over the social networking site will be difficult even with funding secured. The company's board of directors recently decided to block Musk's hostile takeover. This maneuver allows certain shareholders to purchase more stock in an attempt to block Musk from holding a stake of over 15 percent.

The CEO of the company referred to himself as a free speech absolutist and suggested that the company should loosen its moderation policies. I will open it.