Do you know anyone with an extra $5 or $10 billion lying around? That’s right; you don’t. Nobody does, even the wealthiest person in the world, so he has to sell a lot of Tesla stock next week to have the funds in place to complete his $44 billion purchase of Twitter.
Here are the details. A story in Insider sad he has $12.5 billion in debt financing set up already. Before the markets tanked, his initial plan this spring was to have outside investors pay $32 billion. The problem is that the stock market has crashed, making prying dough from them a lot tougher.
Here’s what Dan Ives, an analyst for Wedbush, told Insider.
”It’s pretty simple, the more investors that bail on this deal is, the more money that Musk needs to contribute and therefore sell more Tesla stock.” A non-Wall Street analyst might have come up with that too.
Time is ticking. There’s a deadline looming, October 28, and Musk has to have the capital by then. The price tag of $44 billion is a bit inflated, Ives said.
“The $44 billion Twitter price tag is simply a train wreck for an asset that we peg fair value in the $30 billion range best case in the midst of Everest-like uphill growth challenges.”
So how much stock will it take to scrounge up $10 billion? Tesla closed at $214 on Friday, so he will have to say goodbye to 46,728,971 shares.
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