Image courtesy of Paul Hennessy / NourPhoto by Forbes
ELone Mask will drop one of the risky elements behind his $ 44 billion bid for Twitter, a move you might read as a smart one because the markets have shifted from that single direction in the past few weeks: down, down, down.
Musk has canceled a plan to take a margin loan as part of its financing for a ট 54.20-share takeover, according to A new SEC filing. Originally, he wanted to use ধরনের 12.5 billion in such loans, but several weeks ago, he halved the figure after bringing in additional investors. Now, he says he will create 6.25 billion with additional equity. This does not affect the additional 13 13 billion in standard corporate debt involved in the deal.
If Musk had taken a margin loan, he would have secured it with his Tesla stock, about $ 31.25 billion based on the terms of the loan. With Tesla stock falling, he was in a position to need more Tesla shares to cover debt. Margin loans are a gamble at best. Even more financially difficult times such as periods We find ourselves now.
If the situation worsens, the external possibility was that the mask could face a so-called margin call, when a margin loan secured equity goes bad and a lender is forced to repay the loan. If that happened then Musk would have to sell the stock in all Tesla pay-mail styles, further lowering the share price. (The most dramatic margin calls lead to dramatic consequences, the spiral that consumes and ends a company’s fortunes. This probably won’t happen in the case of Tesla, but it certainly makes a bad situation worse.) Musk’s lender, Morgan Stanley set a threshold for a 40% fall in Tesla stocks to cause such events. With Tesla’s stock already down nearly 25% last month, you get an idea of Musk’s situation: things have changed significantly since he first announced his takeover of Twitter in April.
Mask-Twitter Like everything, there are complications with this turn of events. First of all, where will he get the $ 6.5 billion in equity to replace the margin loan?
He has to do one of two things. Most likely, he will sell more Tesla shares, not a great scene in the down market. Doing so will further reduce Tesla’s stock. Or she has to find more friends to join her happy band, which is not a great sight either. If a month ago it was difficult to convince investors before the market went to bed এবং and to judge Lack Among the high-profile names prevalent on the contract table, it seems certain that it was difficult-it would be more difficult to talk to people now. In the down market, investors are fleeing companies like Twitter, much less profitable and something like a commercial frustration forever. There is no tendency to run towards them. Twitter shares ended at $ 37.16 on Thursday, well below Mask’s $ 54.20 offer.
And it’s not just that! Imagine going on a fundraising trip right now to buy a company that has spent the last few weeks hurting, accusing you of mismanaging the basics of spam speculation. It would be as if Musk was hoping to find someone to partner with him in a fixer-up when he stood on the street and shouted how rats and wolves are in the place. (But don’t worry, I know a good killer. This house will be great after I’m done, He will probably tell any new co-investors. Logically, they would then look at him amusedly and wonder if they should get back to their car quickly.)
Plus, another thing: didn’t Musk say the whole thing was stuck on those spam numbers? In a sense, you can see his decision about the margin loan as a sign that it is too much No. Hold on, and hoping to follow the mask. Why file SEC with margin loan exclusion if he does not? Looks like he could buy the place — even if it had insects in it.
