Axios Pro Exclusive Content

Elon Musk reveals financing plan for Twitter bid

Kerry Flynn
Apr 22, 2022
Illustration of the Twitter logo about to be caught in a lasso.
Illustration: Brendan Lynch/Axios

Elon Musk's Twitter bid is not over as the billionaire claims to have lined up $46.5 billion to fund the takeover.

Why it matters: "Such a joy to work with amazingly talented people at SpaceX, Tesla, Neuralink & Boring Co!" Musk tweeted Thursday. If all goes according to his plan, Twitter would be added to his long list of companies.

Details: Musk said he has two debt commitment letters from Morgan Stanley and other unnamed parties along with his own equity commitment letter, per a recent SEC filing.

  • Morgan Stanley, with backing from other financial institutions, is offering $13 billion in debt financing and $12.5 billion in loans against Musk's Tesla stock. Musk's equity financing is expected to be $21 billion.
  • That financing plan means more than two-thirds of the $46.5 billion package comes from Musk's assets. "That is the reverse of how most investors structure buyouts, with debt secured against the assets of the target company typically comprising the majority of the financing," per Reuters.

The bottom line: "The massive amount of risk — especially after Tesla has shattered market expectations — left some financial analysts puzzled. 'You're giving away caviar to buy a hot dog on the street in New York City,' Wedbush Securities analyst Dan Ives said." — Faiz Siddiqui, the Washington Post

Go deeper