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A comment on Musk announces funding secured for Twitter buy. Parent comment

Re:Musk announces funding secured for Twitter buy by gavinray on Thursday April 21, 2022 @10:24AM (#31109815)
Ah, so it's a reputation/wealth-based thing. That makes sense.

By that logic though -- if you're a billionaire, could you try to buy every profitable company on borrowed money?

Eventually you'd make the money back and since you don't have to pay anything out of pocket, you effectively have $INFINITY dollars to bargain with.

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Re:Musk announces funding secured for Twitter buy by rsstack on Thursday April 21, 2022 @10:29AM (#31109889)
When he requests debt from the banks he needs to show that his current owned assets are worth more than his current debt _and_ the new requested debt. They wouldn't loan the hypothetical billionaire infinity dollars, unless the billionaire has infinity dollars in assets that aren't offset by previous debt.
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Re:Musk announces funding secured for Twitter buy by nabla9 on Thursday April 21, 2022 @10:28AM (#31109870)
It's not reputation based. Musk as requested secured enough loans to pay with cash. His ownership in SpaceX/Tesla is the collateral (as well as his Twitter shares if he buys them).

He has no "infinity" of anything. It's called leverage and it probably maxes out around 60-70% of everything he owns.

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Re:Musk announces funding secured for Twitter buy by naveen99 on Friday April 22, 2022 @08:07AM (#31120597)
seems crazy to take that much leverage when you are worth $200B. the shorts must be salivating at a chance to force a margin call on him, just for fun. Would have been better to just do a tesla twitter merger for free.
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Re:Musk announces funding secured for Twitter buy by bombcar on Thursday April 21, 2022 @10:44AM (#31110084)
The "make the money back" part is what prevents it.

Musk has 100 billion of TSLA say.

He mortgages it to buy TWTR. Now he has 100 billion of TSLA, -40 billion loan against it, and 40 billion of TWTR. He could mortgage TWTR and buy something else, but it would have to be smaller, because the banks won't loan 100% of the value of the thing.

Or he'd have to make another $40 billion and pay off the first loan to mortgage it again.

Think of it as trying to use mortgage properties in monopoly to continue buying other properties.

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Re:Musk announces funding secured for Twitter buy by KptMarchewa on Thursday April 21, 2022 @10:59AM (#31110286)
>He could mortgage TWTR and buy something else, but it would have to be smaller, because the banks won't loan 100% of the value of the thing.

Unless you're on robinhood: https://www.bnnbloomberg.ca/robinhood-traders-discover-glitc...

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Re:Musk announces funding secured for Twitter buy by bombcar on Thursday April 21, 2022 @11:14AM (#31110507)
Robinhood is the exception that proves all the rules.

Maybe we'll see a wallstreetbets post "Musk couldn't take TWTR private but I did via robin hood bug"

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Re:Musk announces funding secured for Twitter buy by s1artibartfast on Thursday April 21, 2022 @10:33AM (#31109938)
Banks don't like loaning multiple times with the same collateral
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Re:Musk announces funding secured for Twitter buy by pydry on Thursday April 21, 2022 @10:28AM (#31109869)
You could try but it'd probably work out for you about as well as when the hunt brothers tried to buy up all the silver on earth.
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Re:Musk announces funding secured for Twitter buy by shkkmo on Thursday April 21, 2022 @10:27AM (#31109855)
Each new loan would have increased scrutiny due to the other loans you carry.
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Re:Musk announces funding secured for Twitter buy by leetcodesucks on Thursday April 21, 2022 @10:27AM (#31109854)
Trump and Gordon Gekko did this
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