Axios Pro: Media Deals

May 03, 2022

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Good morning, Media Deals readers!

Situational awareness: Paramount+ and Showtime reached a combined 62.4 million subscribers, up from 56 million last quarter, Paramount Global reported in its earnings this morning.

1 big thing: Elon chases equity likes

Illustration of Tesla logo and Twitter logo on Elon Musk's shoulders

Illustration: Lindsey Bailey/Axios. Photo: Joshua Lott via Getty Images

Elon Musk has been speaking with investment firms and wealthy individuals about backing his takeover of Twitter, Reuters reports.

Why it matters: Bringing on other backers could mean the deal is no longer as financially tied up in Tesla stock.

What's happening: In his previous financing plan, Musk said Morgan Stanley, with backing from other institutions, would provide $13 billion in debt financing and $12.5 billion in loans against Musk's Tesla stock. Musk's equity financing is expected to be $21 billion.

  • Reuters reports that the new plan could involve private equity, hedge funds or wealthy individuals providing preferred or common equity.
  • That plan would reduce both Musk's $21 billion equity financing and the margin loan against his Tesla shares.
  • Apollo Global Management and Ares Management Corporation have been in talks with Musk, per Reuters.

Details: Musk sold shares of Tesla stock worth about $8.4 billion last month, likely to get more cash on hand ahead of his purchase.

  • Tesla's stock price has dropped by 26% over the past six months.
  • Musk's Twitter purchase could continue to affect Tesla as he balances running his many companies.
  • Twitter filed an FAQ to the SEC about the takeover, confirming that Goldman Sachs and JP Morgan evaluated the deal and that the company is operating in "business as usual" until it closes.

What they're saying: Puck's William D. Cohan wrote about the "silver lining" in Musk tying the deal to Tesla: "[W]hile that certainly does seem capricious on some level, all his collateralized stock does make one thing clear: he is motivated, and fully incentivized, to make Twitter a financial success."

  • Asked about the deal at the Met Gala yesterday, Musk said, "My goal —assuming everything gets done — would be to make Twitter as inclusive as possible and to have as broad a swath of the country and the rest of the world on Twitter and that they find it interesting and entertaining and funny and that it makes their life better."

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