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Twitter Plans to Sell 3 Billion in Shares to Pay Down Debt

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Elon Musk’s team is looking at selling up to $3 billion worth of new Twitter shares to help pay off some of the $13 billion in debt accumulated in its deal to take over the social network, The Wall Street Journal (WSJ) reported Wednesday.

According to the business daily, representatives of Musk already discussed that option with some investors in December and have explained that the financing obtained could be used to pay off some of the higher-interest debt.

However, and when asked by a Twitter user if this information from the WSJ was true, the tycoon responded with a succinct “no.”

This is not the first time that information about Musk’s intention to seek new investments in the company he bought last year has appeared, as in December business press already reported that he had contacted several investors offering them shares at the same price he paid.

The WSJ said that paying off some of the multibillion-dollar debt accumulated would offer significant financial relief to Twitter, which after its sale experienced a sharp drop in revenue, largely due to the flight of advertisers unhappy with Musk’s management and his changes to the platform.

Last November, the entrepreneur himself admitted that the company had suffered a massive drop in turnover and was losing more than $4 million a day.

At the time, Musk did not rule out the option of bankruptcy, although he later offered more positive forecasts after cutting thousands of jobs.

As part of the purchase transaction, Twitter assumed some $13 billion in debt, so it faces large interest payments over the next few years.

According to the WSJ, the most expensive part of that debt is about $3 billion worth of loans that carry a particularly high-interest rate, which has risen in recent months.