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I would really like to hear how he's financing this deal. His net worth has dropped since he's made this play. Most of his money is tied up in equity. So who's

by TSiege 4y ago

I would really like to hear how he's financing this deal. His net worth has dropped since he's made this play. Most of his money is tied up in equity. So who's funding this deal? The fact that this isn't well talked about and that the company is going private is raising a lot of red flags to my eyes

skizm 4y ago
Assuming the same financing as prior to trying to cancel, it will be $13B from banks loaned to Twitter the company. ~$7B from friends of Elon. Then I think something like half of the remaining was supposed to be margin loans against TSLA stock, but since the stock has tanked recently the margin requirements were too high and Musk has indicated he plans to simply sell a bunch of TSLA stock (or otherwise directly from his personal assets).
dwater 4y ago
Matt Levine at Bloomberg has been talking about it frequently as the deal evolved. You can read back through the articles that reference Musk or Twitter in the headline and get a good idea. "The Wall Street banks involved, led by Morgan Stanley, are also ironing out the steps needed to finalize funding about $13 billion of debt commitments." "Banks that committed to help finance Elon Musk’s takeover of Twitter Inc. plan to hold all $13 billion of debt backing the deal rather than syndicate it out, according to people familiar with the matter, in another blow to a market that serves as a crucial source of corporate funding."
- TSiege 4y ago
  Interesting, and thanks for the heads up on where to look. I head read that some of the original financial backers backed out of the deal
HWR_14 4y ago
As I understand it, the financing is $13 billion in money from banks as a loan ~$4 billion in pre-owned Twitter stock (he doesn't have to pay himself) ~$7-8 billion in commitments from other investors (Ellison, a16z, the Bitnance CEO etc.) ~$8-10 billion in TSLA stock he sold in like May when he announced the purchase at $900-$1000/share when he said it was specifically to buy TWTR ~$1 billion in a major investor (I don't recall whether it was a specific Saudi businessman or the Saudi investment fund or the royal family directly) asking to keep his ownership of the company and trade out the shares for teh new compnay shares That still leaves ~$9-11 billion unaccounted for in a very public fashion. At one point, Merrill had promised him a $12.5 billion margin loan backed by his Tesla shares. He claimed not to need it (and removed it from being a contingency on the deal a while ago). Or maybe he secretly used it. It's less than 5% of his net worth, so it seems reasonable to assume he can get or borrow it easily.
colinmhayes 4y ago
The entire point of buying twitter was to give Musk an excuse to sell some of his tesla stock. He did just that, and now combined with twitter leveraged buyout loan and the other investors he's brought in he only needs a few billion in loans against tesla shares to close the deal.

by TSiege 4y ago

skizm 4y ago

Assuming the same financing as prior to trying to cancel, it will be $13B from banks loaned to Twitter the company. ~$7B from friends of Elon. Then I think something like half of the remaining was supposed to be margin loans against TSLA stock, but since the stock has tanked recently the margin requirements were too high and Musk has indicated he plans to simply sell a bunch of TSLA stock (or otherwise directly from his personal assets).

dwater 4y ago

Matt Levine at Bloomberg has been talking about it frequently as the deal evolved. You can read back through the articles that reference Musk or Twitter in the headline and get a good idea. "The Wall Street banks involved, led by Morgan Stanley, are also ironing out the steps needed to finalize funding about $13 billion of debt commitments." "Banks that committed to help finance Elon Musk’s takeover of Twitter Inc. plan to hold all $13 billion of debt backing the deal rather than syndicate it out, according to people familiar with the matter, in another blow to a market that serves as a crucial source of corporate funding."

TSiege 4y ago
Interesting, and thanks for the heads up on where to look. I head read that some of the original financial backers backed out of the deal

HWR_14 4y ago

As I understand it, the financing is $13 billion in money from banks as a loan ~$4 billion in pre-owned Twitter stock (he doesn't have to pay himself) ~$7-8 billion in commitments from other investors (Ellison, a16z, the Bitnance CEO etc.) ~$8-10 billion in TSLA stock he sold in like May when he announced the purchase at $900-$1000/share when he said it was specifically to buy TWTR ~$1 billion in a major investor (I don't recall whether it was a specific Saudi businessman or the Saudi investment fund or the royal family directly) asking to keep his ownership of the company and trade out the shares for teh new compnay shares That still leaves ~$9-11 billion unaccounted for in a very public fashion. At one point, Merrill had promised him a $12.5 billion margin loan backed by his Tesla shares. He claimed not to need it (and removed it from being a contingency on the deal a while ago). Or maybe he secretly used it. It's less than 5% of his net worth, so it seems reasonable to assume he can get or borrow it easily.

colinmhayes 4y ago

The entire point of buying twitter was to give Musk an excuse to sell some of his tesla stock. He did just that, and now combined with twitter leveraged buyout loan and the other investors he's brought in he only needs a few billion in loans against tesla shares to close the deal.