Elon Musk's $44 billion Twitter takeover has so far been marked by turmoil.
After slashing half the company's 7,500 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.
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:
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Foreign Investors
Prince Alwaleed bin Talal al Saud (estimated contribution: $2 billion)
The Saudi prince agreed in May to convert his shares of Twitter, worth nearly $2 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 skepticism 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.
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The Qatar Investment Authority ($375 million)
Known for its investments in companies including Barclays, Credit Suisse and Volkswagen, the $450 billion fund has an expansive footprint across the globe, and counts itself among Musk's investors, putting up $375 million toward the deal. The fund is fueled 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 finale.
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Binance ($500 million)
The massive cryptocurrency exchange 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 $500 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 $250 million or more gets special access to confidential company information. But giving that privilege to foreign investors is raising flags with Biden and U.S. 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.
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Venture Capitalists
Andreessen Horowitz (estimated contribution: $400 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 $250 [million] with no additional work required," Andreessen wrote. His firm would go on to give even $400 million. He has cheered on Musk in recent weeks on Twitter, particularly during the release of the "Twitter Files," a string of releases on behavior 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.
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Sequoia Capital ($800 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 emphasizes 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.
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Elon's Buddies
Larry Ellison (estimated contribution: $1 billion)
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 $1 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 percent majority of users in a Twitter poll he ran voted in favor of the decision.
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Jack Dorsey ($1 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 $1 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 apologized 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.
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Banks
Morgan Stanley, Bank of America, Barclays (estimated contribution: $13 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 $13 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 $44 a month to recoup the advertising value generated by the top segment of U.S. 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 $1 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 percent 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