Elon Musk gives up Tesla-backed loans as part of his Twitter acquisition
Elon Musk will no longer use loans backed by Tesla stock as part of his Twitter acquisition, instead adding $6.25 billion in personal funds to the $44 billion deal, according to a new filing with the SEC emerges, which was filed on Tuesday.
Musk’s original proposal included a $12.5 billion margin loan — with his Tesla stock as collateral — a decision that looked increasingly precarious as the electric-car maker’s shares began to decline. He later cut the loan amount in half before eliminating the balance this week.
Tesla shares have plummeted nearly 40 percent over the past six months amid a broader technology downturn, including a 25 percent drop in the last month alone.
It remains to be seen whether Musk will actually go through with the transaction. Earlier this month, he abruptly declared that the deal was “temporarily on hold” when demanding more information about whether Twitter had underestimated the number of spam or fake accounts on its platform.
Musk has asserted that he’s still committed to the acquisition, though he continued to blast the issue — with scant evidence — suggesting he was either trying to negotiate a lower price or maybe pulling out altogether.
On May 16, Twitter CEO Parag Agrawal outlined in detail the company’s approach to fighting spam and estimating illegitimate accounts. Musk responded to the tweets with a poop emoji.
Nonetheless, company executives signaled at a town hall last week that they were not prepared to renegotiate the price of their agreement, a source who heard comments confirmed to The Daily Beast. The terms of the deal will make it harder for Musk to just walk away. At best, he’d likely have to pay a $1 billion breakup fee, and Twitter could also sue to try to enforce the transaction.
Twitter stock is up 4 percent to around $39 after the close on Wednesday, but remains well below Musk’s $54.20 per share bid.
The billionaire is still looking for help to go through with the transaction. He is discussing potential investments with existing shareholders, including former CEO Jack Dorsey, according to the new SEC filing.
https://www.thedailybeast.com/elon-musk-ditches-tesla-backed-loans-as-part-of-his-twitter-takeover?source=articles&via=rss Elon Musk gives up Tesla-backed loans as part of his Twitter acquisition