Musk wins with 1-0 against Twitter
Whatever strategy you want to apply, whether it's a poison pill or something else, it doesn’t matter to the richest man in the world. It seems like he has planned out everything well in advance. He made an announcement that he has lined up $46.5 billion in financing to buy Twitter Inc and he did it! Yes! You heard that right. He did a Leveraged Buyout of Twitter Inc for $ 44 billion. Musk’s latest response comes after Twitter ignored his offer and adopted a “poison pill” strategy to prevent Elon from buying the platform outright. Musk, a “free speech absolutist”, has said Twitter needs to be taken private and make it a platform for free speech.
Last week, the CEO of Tesla announced an offer to buy the social media giant for $54.2 per share, or around $43 billion. Though he is the richest man in the world, the market was quite worried as to where he will arrange that much amount of funding too soon. Either he has to liquidate stake in his first company, Tesla motors will risk the company’s share price sliding overnight, or he has to borrow against his shares (pledge his shares). According to the Bloomberg index, he’s already borrowed about $20 billion against his shares; about $35 billion can be more pledged.
Recently, a document filed with US securities regulators states that Musk will commit $33.5 billion, which will include $21 billion of equity and $12.5 billion of margin loan. Morgan Stanley, has also agreed to provide another $13 billion in secured debt. This news makes Tesla Motors investors at ease. It seems that Elon has quite a great team behind his back to advise him regarding acquisition. Under the tender offer, he mentions that he will take his offer directly to other shareholders.
So yeah, Elon won the battle with 1-0 against Twitter. Now, the biggest challenge that arises in front of musk is will he be able to transform Twitter into a free speech platform, the way he promised his die-hard followers. Are you also one of the followers? What’s your take on this whole deal?
See you until next time……
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