Elon Musk takes over Twitter

Means the company will go private. He will own the company. His toy, he can make whatever rules he wants. God help whoever he found to finance it, if the financing really exists.

The board likely tested to see if there were any other bidders anywhere near his price and got zilch. The only question is whether he really has the financing lined up.

 

FYI, his 54.20 per share puts his value for twitter @ 7 times revenue. Rather than take my notions about whether that is overvalued, consider that that is twice the price to revenue multiple Facebook trades at.

His ego just wrote a massive check he's going to regret, because he has no grand plan, or a complementary business of some sort, that is going to turn twitter into something more than it already is.

If you're a long-term twitter shareholder, he just 1) bailed you out, and 2) gave you a gift.

 

Don't think. Know. He took out a massive margin loan from Morgan Stanley with his Tesla stock as collateral and is putting up about $12.5 billiomn himself.

He has to pay back that loan.

That loan is not low-rate financing. According to his regulatory filing, it could cost him about $1 billion in interest and amortization. But he had no other options. He's only wealthy on paper and has been financing his lifestyle with similar loans. If Tesla stock comes down to a valuation commesorate with the actual business (i.e. -- the Fed has lost control and the everything bubble that has made him a household name pops), they are going to call in that loan. And it's not as if Twitter is going to throw off enough cash for him to pay up. He would not have financed it this way if he had any other options. But his ego led the way and he has bullshitted his way out of things so many times, the guy really thinks he is bulletproof.

As for Twitter, the business is what it is. Little cash flow, lack of a subscription model, dependent on advertising, which shies away from it because of a lot of the content. His idea is to get rid of the advertising. ... good luck with that. It's the only revenue the business generates.

None of that takes into account the rest of his financing, and the terms, which may or may not exist as far as any of us knows at the moment.