Elon Musk takes over Twitter

If Elon Musk wants to air out the company's past like this, that's his right. Few people are going to care, but OK. And if he wants to make Twitter a free-for-all that is dominated by conspiracy theorists and reality deniers, that's for him to do, too.

I personally find it an um, unique way to piss away $44 billion, because I don't see how that strategy is going to make this company worth anywhere near what he paid for it at any point. Right now, 95+ percent of the company's actual revenue comes from advertising, and in a soft environment to begin with, he's spooking those advertisers.

He's got an interest payment of something like $1.2 billion due in the next 10 months or so, and I know Twitter won't be throwing off enough cash to meet it, so the hilarious thing for me is going to be watching him reach into his own pocket some more, in order to play carnival barker and keep flailing away because he got stupidly got himself in over his head, and he thinks his "any publicity is good publicity" way of bullshitting people is going to magically work this time.

I am actually really enjoying this.

 

What convinces you of that?

Because this is what we actually know. ...

He secured $7.1 billion from equity investors (Larry Ellison, Saudi Prince Alwaleed bin Talal, etc.). And he found $13 billion in leveraged-buyout debt financing from banks. He already owned $4 billion worth of Tesla (he owned 9.6 percent of the company) when he made his insane offer. And he came up with $22.4 billion of funds to cover the rest of the equity financing by selling Tesla stock. So he personally owns at least $26 billion worth of equity in the company. If there was some outside equity that he sold mysteriously that didn't come from all the Tesla stock he was selling, it hasn't been reported.

That $13 billion in loans is as good as him being on the hook for $39 billion (add it to his equity stake), because if the company defaults his equity could end up worthless.

The real story that nobody is really watching because of the sideshow he is creating is that he knows he is up shit's creek right now. There is a $1.2 billion interest payment looming for a company that last year threw off only about half of that in cash. It's why there were stories yesterday (with anonymous sources) about how his bankers are discussing ways to lower that interest payment, including replacing some of it with lower-interest rate margin loans that are backed straight-up by his Tesla stock (formalizing him being personally on the hook).

Elon Musk’s Bankers Consider Tesla Margin Loans to Cut Risky Twitter Debt