Elon Musk signed a $44 billion deal announced in April twitter Privately held, Inc took ownership of an influential social media platform by quickly firing its management team.
“Birds freed,” he tweeted, clearly nodding to his desire to reduce the limits on what content can be posted. did. Earlier this month, Musk put the deal back on the table after previously trying to back it off. Musk has said he’s excited about the Twitter acquisition, but he and his co-investors are overpaying.
What is his financial plan?
Musk has pledged to provide $46.5 billion in equity and debt financing for the acquisition. Banks, including Morgan Stanley and Bank of America Corp, pledged $13 billion in debt financing.
Experts say commitments from banks to contracts are firm and tight, limiting their ability to walk away from contracts despite the potential to face large losses.
Musk’s $33.5 billion equity investment included a 9.6% stake in Twitter worth $4 billion and $7.1 billion secured from equity investors including: Oracle Corporation co-founder Larry Ellison and Prince Alwaleed bin Talal of Saudi Arabia.
This left Musk with an additional $22.4 billion in funding to cover the equity financing portion of the deal.
Since the co-backers were revealed, Apollo Global Management Inc and Sixth Street Partners have withdrawn their offers.
from the mask’s own pocket
Musk, 51, is the richest person in the world with a net worth of $222 billion according to Forbes, but most of his fortune is tied to his stock. Tesla and Space X.
According to Reuters calculations, Musk had about $20 billion in cash after selling some of his Tesla stake through multiple transactions in November, December, April and August of last year.
Musk would have needed to raise another $2 billion to $3 billion to complete the financing of the deal.
What about shortfall?
It wasn’t immediately clear how Musk would close the nearly $3 billion funding gap. Wedbush analyst Daniel Ives said it could be outside capital as no Form 4 was filed this week and investors are likely already backing the deal. rice field.
Musk was widely expected to sell more of his Tesla stake in the nine days between the electric car maker’s earnings release on Oct. 19 and the trading close on Oct. 28. There are no sales announcements at this time.