Musk Continues Effort to Takeover Twitter, Securing $46.5 Billion in Funding and Offering Up Tesla Stock as Collateral

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Elon Musk secured a whopping $46.5 billion to potentially launch a tender offer to purchase Twitter, directly from the shareholders – a move that could allow the eccentric billionaire to bypass the board.

Musk, who is apparently dead set on owning the social media giant and plans to reform what he sees as its compromised free speech policies, previously had a takeover bid rebuffed by Twitter’s board.

CNBC reported the details behind Musk’s massive fundraising endeavor, announced in a Thursday filing, noting that “Musk has secured about $25.5 billion in debt financing through Morgan Stanley Senior Funding and other firms, and he said he has committed about $21 billion in equity financing. The other participating firms include Bank of America, Barclays, MUFG, Societe Generale, Mizuho Bank and BNP Paribas.”

BREAKING: Elon Musk has

1. $25.5B in financing for Twitter from a group of banks led by Morgan Stanley—includes $12.5B in margin loan against his Tesla shares.

2. The rest of the money ($21 B) is coming out of his own pocket. (SEC filing)

Translation: THIS GUY IS SERIOUS.

— Trish Regan (@trish_regan) April 21, 2022

Bloomberg dove deeper into Musk’s contribution, noting the businessman has only about $3 billion in cash and would need to borrow the rest against his Tesla shares.

“Musk would need to pledge about 58.7 million Tesla shares to secure the $12.5 billion margin loan facility included in the debt financing,” explained Bloomberg, noting that handing over the ownship of so many shares “raises questions” about Musk’s future stake in Tesla.

Musk’s floating of a tender offer to effectively take Twitter private under his control is reminiscent of a controversial tweet he made in 2018, which at the time cost him his job as Tesla CEO.

Reuters explains:

In 2018, Musk tweeted he had “funding secured” to take Tesla Inc (TSLA.O) private for $420 per share – a move that led to millions of dollars in fines and him being forced to step down as chairman of the electric car company to resolve claims from the U.S. securities regulator that he defrauded investors.

Musk’s continued efforts to buy Twitter are certainly not without risk as $46.5 billion is a vast sum that may prove even too difficult for the world’s richest man to raise.