On April 24, Tesla CEO Elon Musk proposed a financing plan of up to $46.5 billion to raise enough money to buy social media Twitter. According to foreign media calculations, Musk himself has enough Tesla stock that can be used as collateral to borrow at least $24 billion from banks.
According to the financing plan, in addition to already owning $4 billion worth of Twitter stock, Musk needs to raise about $33.5 billion, which may require him to sell most of his unsecured Tesla shares.
As of the end of 2021, Musk held about 173 million Tesla shares, plus 59 million options that can be exercised within 60 days, for a total of 21% of Tesla’s shares. Regulatory filings filed in June 2021 show that more than 88 million of those shares have been used as collateral for personal loans.
For Musk’s financing plan to buy Twitter, the US investment bank Morgan Stanley (Morgan Stanley) is willing to provide a $12.5 billion loan, but the loan requires $62.5 billion worth of Tesla stock as collateral. Based on Tesla’s current share price, that’s about 61 million shares. If those numbers are accurate, that leaves about 23 million unpledged shares worth about $24 billion.
Musk also pledged to provide $21 billion in additional equity financing for the Twitter acquisition. Unless a co-bidder joins Musk, that could mean he will sell nearly all of his unsecured stock.
However, along with Tesla’s dazzling first-quarter financial results, Musk himself has just unlocked a new round of rewards. According to this agreement,Musk has the right to buy 8.4 million Tesla shares at $70 per share. Based on Tesla’s closing price on Friday, that means those awards are worth more than $24 billion in total, exceeding even the largest possible equity payout he promised to buy Twitter.
However, some analysts pointed out that Musk may not bid for Twitter alone, but cooperate with other institutions, which will reduce his personal investment. But either way, with his wealth growing faster than Musk can spend, the billionaire will still have enough money to start his next venture.
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