EAnother risk factor for Mask’s bid for the ৪ 44 billion Twitter has been dropped. This is a wise move considering the trend the stock has been following for the past few weeks.
According to the new SEC filing, Musk no longer plans to receive a margin loan to finance the acquisition of আর 44 billion, or $ 54.20-per-share. Musk originally planned to borrow $ 12.5 million to finance the transaction. However, the number has halved since the addition of additional investors. Now, he says he will create $ 6.5 billion in additional equity.
If he had a margin loan, he would have to secure it with his Tesla stock. Under the terms of the loan, Musk will have to submit ট 31.25 billion worth of Tesla shares. Because stocks were falling, Musk needed more Tesla shares to pay off debts. Margin loans can seem like a risky bet at good times. Even more so when you are in financial crisis, as we find ourselves now.
If the situation worsens, there was an outside possibility that 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. To make this happen, Kasturi will have to sell all its Tesla stock, further frustrating the share price. (Worst margin calls have led to the most tragic spirals, which have completely engulfed and destroyed companies. Archegos Capital Management has recently experienced this. It probably wouldn’t have happened in Tesla, but it would have created a worse situation. Worse.) Stanley set a threshold to trigger such an event: Tesla stock fell 40%. And with Tesla’s stock already down nearly 25% last month, you’re getting an idea of Musk’s situation: significantly different today, compared to when he first talked about taking to Twitter in April.
Masks and Twitter have the same complexity as everything else. How will he get the $ 6.5 billion equity needed to repay the loan margin?
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 She needs to find more friends to be part of her band. This is not a good scenario. If it was hard to convince investors a month ago before equities began to slide এবং and because of the traditionally high-profile names on the contract table, it seems certain it was difficult-it would be even harder to talk to people now that Twitter shares ended at $ 37.16 on Thursday. Has been, well below Mask’s অফ 54.20-share offer. Imagine for a second you were transposed into the karmic driven world of Earl.
When the market goes down, investors move away from businesses like Twitter. They are often not financially viable and will always be a commercial failure. They are not interested in following them. Looks like Mask is looking for someone to go to a fixer-upper house with him after standing in the street screaming and how the house has rats and the electricity is all thrilling. (But don’t worry, I know a good killer, He will probably tell all new co-investors. This place will be great after I get done with it.They may find him ridiculous, logically.)
And here’s another thing: Didn’t Musk say that the whole thing was holding those spam numbers? In a sense, you can see his decision about the margin loan as a sign that it is not on hold, and that Musk hopes to follow suit. Why file SEC with margin loan exclusion if he does not? It seems he can occupy the position even if there are insects.