Elon Musk, the CEO of Twitter, is reportedly seeking to raise as much as $3 billion to pay off a portion of the $13 billion loan package he used to acquire the social media platform last year, according to a report by the Wall Street Journal. The report states that Musk was in talks with potential investors about selling $3 billion in new shares of Twitter in December, with the goal of using the funds to pay down the highest cost, unsecured portion of Twitter’s debt.
However, the report also notes that attempts to raise the money at the takeover price of $54.20 per share were met with resistance from prospective investors due to Twitter’s financial condition.
In response to the Wall Street Journal report, an account tweeted at Musk asking if the story was “accurate.” Musk tweeted back, “No.”
The potential influx of cash could provide some relief for Twitter, which has struggled to retain advertisers on its platform. In November, Musk had previously stated that bankruptcy was a possibility. The company also experienced a “massive drop in revenue” following an exodus of advertisers. A separate report by the Wall Street Journal in December stated that attempts to hold onto advertisers put off by Musk’s revamp of the site were not going well, with around 70% of the biggest spenders before Musk’s takeover no longer spending ad money on the site as of the week ending December 18. Advertising accounts for about 90% of Twitter’s revenue.
Despite these challenges, Musk remained optimistic about Twitter’s future, stating, “I now think that Twitter will, in fact, be OK next year,” after implementing a range of cost cutting measures, including a round of widespread layoffs in December.