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Crypto CEO says Elon Musk has no plan for Twitter, reveals why he wrote him a $500m 'blank cheque'

Business Insider US
Tesla CEO Elon Musk is pulling together the funds to take Twitter private in a $44 billion deal. REUTERS/Andrew Kelly
Tesla CEO Elon Musk is pulling together the funds to take Twitter private in a $44 billion deal. REUTERS/Andrew Kelly
  • Elon Musk is taking Twitter private with the help of investors. 
  • Binance, the cryptocurrency exchange, invested $500 million. 
  • Binance's CEO called the sum a "blank cheque," and said he didn't discuss a business plan with Musk. 
  • For more stories go to www.BusinessInsider.co.za.

Binance, the world's largest cryptocurrency exchange, is investing $500 million as part of Elon Musk's deal to take Twitter private.

That sum is simply a blank cheque, CEO Changpeng Zhao told the Financial Times on Thursday. Zhao quickly decided to dedicate half a billion dollars to the deal without hearing so much as a business plan from Musk, he said. 

"We, from our friends, heard that [Musk] was looking for third party investors, and are we interested?," he recounted to the British newspaper. "We immediately said that we are. He didn't have a plan for Twitter. There isn't, like, a business plan. So it wasn't that type of discussion."

Zhao told the Financial Times that Binance will support Musk however he chooses to use the funds and is especially excited about the potential of a cryptocurrency tie-in with Twitter. 

"It's more of a blank cheque," Zhao told the outlet. "After the investment... Elon will figure out what he wants to do, and we'll be supportive of that." 

While Musk has voiced a few options for changes at Twitter, including charging government and business users, eliminating bot accounts, and loosening content moderation (Musk calls himself a "free speech absolutist"), there's been little overarching strategy laid out publicly. 

Although Musk said he doesn't care about the economics of Twitter during an interview at a TED conference in April, Bloomberg reported that he pitched various strategies for shoring up the social network's finances in meetings with bankers. According to The New York Times, Musk told potential investors they could double or triple their money and that he could grow Twitter's userbase to 500 million in short order. 

Joining Musk on his go-private bid are 18 backers, including Oracle co-founder Larry Ellison, venture capital firm Sequoia Capital, and Fidelity, who collectively invested some $7.1 billion, regulatory filings revealed on Thursday.

Musk previously said he secured the $44 billion needed to buy Twitter through loans from seven banks, a loan against his stake in Tesla, and his own cash. The new investors will allow Musk to borrow less from banks, Musk told the Securities and Exchange Commission.

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