$44 Billion – Where Does Musk Get the Money to Buy Twitter?

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The battle between Tesla boss Elon Musk and Twitter to take over the world-famous SMS service, which has been fought hard through a dispute in court, should soon end. Because Musk bought time with the decision of a court in the US state of Delaware to suspend the acquisition process until October 28.

At the end of October, the tycoon can get the takeover, which he had not done in the meantime, in a dry cloth. But for that, even the richest man in the world has to stretch. After all, he now has to raise $44 billion.

Musk said earlier this week that he would pay $54.20 per Twitter share, as originally announced in the April purchase agreement. However, financing for the deal should be in place, he added. Both parties distrust each other. Because Musk had stated in July, following alleged false statements by Twitter about the number of fake accounts on the platform, not to complete the purchase. Musk and Twitter subsequently sued each other. Now the billionaire wants to get serious.

Musk wants to raise $46.5 billion
Musk had promised to raise a total of $46.5 billion in equity and debt for the deal to pay for the $44 billion price tag and high cost of the transaction. Banks, including Morgan Stanley and Bank of America, have pledged to contribute $13 billion in debt financing to the deal. Twitter, however, is keeping a close eye on Musk’s fingers and said Thursday, citing a bank that Musk had not yet given the financial institution a binding statement that he really wanted to complete the transaction. Musk, on the other hand, emphasized that the banks were working together to secure financing for the deal by Oct. 28.

On the other hand, Musk now has to raise his own funds, which should amount to about $33.5 billion. The businessman can draw on his Twitter share of 9.6 percent, good for about four billion dollars. He can also draw on money from well-heeled co-investors, including Oracle founder Larry Ellison and a Saudi prince. This total is about $7.1 billion. That leaves $22.4 billion, for which he will probably have to open his treasury more generously.

Musk is the richest man in the world
Musk, 51, is the richest person on Earth with a fortune estimated by Forbes magazine at $219 billion. But not all funds in the Musk empire are liquid. Much is tied to shares in his companies Tesla and Space X. According to Reuters calculations, Musk is sitting on about $20 billion in cash after the collapse of his Tesla stake in November and December, as well as in April and August. So there must be two to three billion dollars left before Musk gets there.

But Musk can solve this too – because he has a few options for that. The billionaire could divest further shares in Tesla or reduce its stake in Space X. Another option would be to use the stock as collateral to get more loans. Or Musk could just get more investors on board. Musk had emphasized in August that he did not want to part with further Tesla shares. But since Musk has already made several U-turns, Tesla shareholders fear he might change his mind and toss shares in the electric car maker. According to Reuters calculations, the value of its Tesla package should be around $111 billion. Musk therefore still has a lot of leeway.

Source: Krone

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