Elon Musk is already facing pushback on multiple fronts on his plan to buy social media company Twitter for about $43 billion.
The billionaire launched his takeover bid this week after weeks of back-and-forth wrangling with Twitter since he became a major shareholder. First, he was going to join the board. Then, he decided not to join the board.
Now, he wants to buy the whole company and take it private. But Twitter’s board, employees and Musk’s own resources might make his takeover attempt a tough task to complete.
Here are the barriers standing between him and owning the social media app.
His money is tied up
The world’s richest person might not have the money to buy Twitter. Much of Musk’s wealth — about $251 billion, according to the Bloomberg Billionaire’s Index — is tied up in Tesla and SpaceX ownership, companies where he serves as CEO.
According to a Bloomberg analysis, Musk has about $3 billion in liquid assets — leaving him about $40 billion short of his proposed purchase price.
Still, he has options to get the money, said Dan Ives, an analyst with Wedbush Securities. Musk could structure part of the money as debt financing, and then use his Tesla stock as collateral to get loans for the rest from banks, Ives said.
He could also sell Tesla shares, but selling too much could risk the stability of his companies’ stock prices.
“I mean, I could technically afford it,” Musk said during a live interview at a TED conference Thursday.
A Bloomberg Intelligence note cast doubt on the deal this week. “Musk’s ‘best and final’ $43 billion non-binding offer has numerous conditions, including completion of financing, which we believe give it a low probability of success,” the note reads.
April 16, 2022 at 04:41AM
https://www.washingtonpost.com/technology/2022/04/15/elon-musk-twitter-uphill-battle/
Five reasons it will be hard for Elon Musk to buy Twitter - The Washington Post
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