They are also assuming an existing shareholder would only do this if they believe the future private Twitter would be a more profitable endeavor for them, which Musk's comments really shouldn't inspire confidence in.
GP is implying that since Musk is relying on this in order to finance it since he doesn't have 43B in cash.
If this is a plausible scenario, and I don't know that it isn't, do you think it's what he means or is trying to express?
Because it seems to me that the way he says he'll keep the shareholders, it's intended to communicate to his countless groupies that they will somehow still be able to own Tesla in their Robinhood accounts. Which would be nonsense, right?
Essentially, the holders believe that past performance is not reflective of possible future performance. The shorts and sellers and non buyers believe that us the case or that there are more efficient allocations of their money.
Currently, Twitter userbase is ripe for monetization.
> Or Musk could borrow more against his Tesla stake. Tesla’s own policies prohibit Musk from borrowing more than 25% of the value of his shares, which is barely enough to buy Twitter, even ignoring the fact that he has already used at least some of that capacity. Of course he’s in charge of Tesla and its board is famously deferential to him, so I guess he could change those policies, but that still requires finding a bank to lend him $40 billion against his Tesla stake to finance this lark. Tesla’s stock has quadrupled since mid-2020; if it fell back to mid-2020 levels — say because its charismatic attention-seeking CEO found a new toy — then the loan would be underwater, and selling out of a gigantic Tesla margin loan does not seem like a lot of fun for a bank.
I'm sure he could manage to finance this just fine.
This is a lot of money, even for Musk.
I don't see this deal happening. He can't afford it (without exposing himself to unnecessary risk). If it does go through in the ways described here, he's an idiot ... and I don't believe that, despite my personal opinions about him.
This deal likely won't haooen, but due to the poison pill, not due to the risk.
But in any case, my point was merely exactly what I wrote: he does not need to raise anywhere near the full amount, because he can utilize the shares he buy as part of the collateral.