Musk Says He Has the Means to Purchase Twitter, however Buyers Aren’t So Positive

“A easy character battle, it doesn’t disqualify a proposal,” Mr. Pascarella mentioned. “But when they’re tying Elon’s character traits to the chance of the deal occurring — are you able to give you the money, and can the deal really shut — then that may very a lot be considered.”

Mr. Musk is the richest particular person on this planet, with a internet price pegged at effectively north of $200 billion. However his wealth is generally tied up in Tesla inventory. As chief govt of Tesla and one in every of its largest shareholders, Mr. Musk owned a couple of fifth of the electrical carmaker as of December. However Tesla limits its executives to utilizing not more than 25 p.c of their inventory as collateral for borrowing, and Mr. Musk already has pledged a portion of his Tesla shares for different loans, in accordance with firm filings.

He might theoretically pledge the remainder of his eligible Tesla shares to lift sufficient funding to purchase Twitter. However Tesla stays a wildly risky inventory, buying and selling between $766 and $1,145 in a matter of weeks — which might give pause to banks contemplating lending to Mr. Musk towards his Tesla holdings.

Mr. Musk might additionally go to banks to assist present the $15 billion to twenty billion in debt financing that analysts say the bid requires, which might be added to Twitter’s stability sheet. However Morgan Stanley, the funding financial institution that’s advising Mr. Musk, just isn’t identified on Wall Avenue for pulling collectively the sort of large-scale financing a purchase order of Twitter would require.

Morgan Stanley might rope in banks with larger stability sheets, like JPMorgan Chase and Financial institution of America. However a tense little bit of historical past between JPMorgan and Mr. Musk might compel the financial institution to take a seat it out. Final yr, JPMorgan sued Mr. Musk over a deceptive Twitter publish during which he claimed to have secured funding for his supply to take Tesla personal, alleging that it violated the phrases of a contract between the 2 entities.

JPMorgan declined to remark.

A 3rd possibility for Mr. Musk is personal fairness. When he contemplated taking Tesla personal in 2018, he famously introduced within the providers of Silver Lake, a technology-focused personal fairness agency. Silver Lake already has a connection to Twitter. The agency’s co-chief govt Egon Durban joined Twitter’s board in 2020 after a $1 billion funding by Silver Lake.

However there’s a catch there, too. When it invested in Twitter, Silver Lake signed an settlement that severely limits its capability to accumulate greater than 5 p.c of the corporate. That settlement might hinder its willingness or capability to crew up with Mr. Musk.


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