Musk abandons Twitter acquisition with Tesla stock as collateral for an additional $6.25 billion in equity financing

Tesla CEO Elon Musk abandoned plans to use his Tesla stake to take out a mortgage to fund the Twitter acquisition and increased the equity financing portion of the deal to $33.5 billion,media reported. .

Musk will provide an additional $6.25 billion in equity financing for the Twitter acquisition, according to a May 25 regulatory filing.That was enough to help Musk avoid taking out an equivalent mortgage tied to his Tesla stake.

The new funding structure for Musk's acquisition of Twitter could reduce the risk of the deal for Musk and his lenders, especially given the recent slide in Tesla's stock price.Tesla shares have fallen about 40% since Musk first announced his Twitter stake in early April.A prolonged decline in Tesla's stock price could leave Musk without enough unsecured stock to pay his mortgage.

Image credit: Musk

While Musk still needs to come up with $33.5 billion in equity financing, he can turn to others for help.Musk is seeking additional funding commitments, including discussions with Twitter co-founder Jack Dorsey and other investors to inject their stake into the private company, according to the latest filing.

Earlier this month, Musk had announced a $7.1 billion equity commitment from investors including billionaire Larry Ellison, Sequoia Capital and Binance.Musk has secured another $1 billion in equity commitments since the first round, and his advisers are raising up to $6 billion in preferred stock financing from potential investors,media reported earlier this month.

Musk had already sold $8.5 billion in Tesla stock to help fund the Twitter deal, but he tweeted at the time that he did not plan to sell further his Tesla stake.Musk is the world's richest man, with a personal fortune of $200 billion, thanks largely to his Tesla stake, according to the Bloomberg Billionaires Index.