Investors who helped Elon Musk acquire X for $44 billion two years ago included some of Silicon Valley’s top venture capitalists, members of Saudi Arabia’s royal family and a fund with ties to disgraced hip-hop mogul Sean “Diddy” Combs, according to court documents.
A federal judge in San Francisco on Tuesday ordered Co. X to disclose a list of shareholders who were part of the group that took the company, formerly known as Twitter, private in October 2022.
The filing lists about 100 investors holding shares in X. According to The Washington Post.
According to the filing, X is partially owned by prominent venture capital firm Andreessen Horowitz, Saudi Arabian Prince Alwaleed bin Talal Saud, and Twitter founder and former CEO Jack Dorsey.
Oracle co-founder Larry Ellison, a self-described friend of Musk’s, reportedly donated $1 billion to the investment group that bought Twitter.
Company X has resisted attempts to disclose the investor list. The company is being sued by several former Twitter employees who claim Musk violated an arbitration agreement by failing to pay certain fees after buying the company.
Technology journalist Jacob Silverman, represented by lawyers for the nonprofit Reporters Committee for Freedom of the Press, filed a motion in court seeking unsealing the documents, and his request was granted by U.S. District Judge Susan Illston.
Katie Townsend, legal director for the Reporters Committee, praised Illston’s ruling, saying it validated “the public’s interest in knowing who owns X.”
To complete the acquisition, Musk borrowed $13 billion from multiple banks, including Morgan Stanley, Bank of America, and Barclays.
In total, Musk owes the banks more than $1 billion a year in interest payments.
Anne Wall Street Journal analysis Earlier this week, it emerged that Musk’s $13 billion loan from banks was the lender’s worst merger financing deal since the 2008-2009 recession, largely because the lender was unable to sell the debt to other investors.
Banks that provide loans for mergers and acquisitions make a profit by getting the acquirer to forgive the debt in the short term and collecting fees on that.
However, X’s financial position is so weak that selling the loan would mean the bank would incur a loss. As a result, the loan is “hung” in industry jargon and remains stuck on the bank’s balance sheet.
According to the Wall Street Journal, the loans made to Twitter have remained unsold for longer than similar deals made since the 2008-2009 financial crisis.
Leaked documents from Company X earlier this year showed the company’s value had fallen by more than 70% to around $12.5 billion.
Mutual fund giant Fidelity, which also backed Musk’s acquisition of the company, has downgraded the value of its shares to between $15 billion and $16 billion.
At the time of the acquisition, Musk and his lenders knew that the $44 billion he paid was far more than the company’s actual value.
But according to The Wall Street Journal, the bank was attracted to the idea of providing services to Musk, who was then the richest man in the world, and ultimately decided to lend to him.
Musk has cut Twitter’s workforce by about 80% since buying it and has struggled to win back advertisers who left the company in protest over lax content moderation policies that critics say allowed hate speech to flourish.
The Post has reached out to Mr X for comment.
