Even for the world’s richest person, $43 billion is a steep price.
Published On: Friday, April 15, 2022 | By: Team KnowMyStock
Elon Musk’s proposed all-cash offer to buy Twitter Inc. represents about one-sixth of his $250.6 billion fortune. Yet the vast majority of that wealth is tied to his stake in Tesla Inc., the electric carmaker he co-founded that has surged in value over the past two years and lifted him to the top of the Bloomberg Billionaires Index. Musk has several financing paths for the purchase. One option is to sell his Tesla shares outright. Another is borrowing against them to stage a leveraged buyout, possibly with outside partners. Musk currently has about $3 billion in cash or other somewhat liquid assets after spending $2.6 billion buying a 9.1% stake in Twitter in recent months, according to Bloomberg calculations.
Elon Musk needs 'massive loan' or big Tesla stock sale to buy Twitter. For Musk to raise the additional $36 billion in cash needed to buy the rest of Twitter would require selling about 36.5 million Tesla shares, or more than a fifth of his stake. His other option is to borrow against his positions in Tesla and space exploration company SpaceX.
But even for the wealthiest person in the world, there are limits: The Bloomberg index estimates that he’s already borrowed about $20 billion against his shares, leaving about $35 billion remaining that he could theoretically take out against the two holdings.
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