Business Maverick: Musk’s Twitter Financing Plan Raises Questions About Tesla Stake

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Elon Musk says he’s secured $46.5 billion in funding for a takeover of Twitter Inc. But more than two-thirds of that is either coming from his own pocket or borrowing against his Tesla shares.

Musk’s filing with the U.S. Securities and Exchange Commission on Thursday details $25.5 billion in debt financing from Morgan Stanley and other financial institutions, including margin loans backed by his equity stake in Tesla Inc. It also includes $21 billion in equity financing to be provided by Musk himself.Musk currently has about $3 billion in cash or other somewhat liquid assets after spending $2.6 billion buying a 9.1% stake in Twitter in recent months, according to Bloomberg estimates.

Musk would need to pledge about 58.7 million Tesla shares to secure the $12.5 billion margin loan facility included in the debt financing. That would bring the total percentage of shares he’s pledged to about 85% of his holdings. The margin loan facility documents do allow Musk to sell his unpledged Tesla shares.

 

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