back to article Elon Musk needs more cash for Twitter buy after Tesla margin loan lapses

Elon Musk must personally secure $33.5 billion to fund his $44 billion Twitter purchase after allowing a $12.5 billion margin loan against Tesla stock to expire. Regulatory filings released Wednesday show the Tesla and SpaceX boss agreeing to secure "an additional $6.25 billion in equity financing" on top of the original $27.3 …

  1. Shuki26

    "stolen"

    "after supporters stormed the Capitol on January 6 last year under the belief that the election of Joe Biden was "stolen" – something Trump falsely claimed ad nauseam."

    Trump did not 'falsely' claim, rather he claimed, period. If TheReg is going to take a stand that the election was not stolen, then the word should not be in quotes, rather as a matter of plain fact, a claim that still does not need a description.

    1. Yet Another Anonymous coward Silver badge

      Re: "stolen"

      It's stolen in quotes because that was the term Trump used without defining what he meant. If he had said how the election was invalid the reason wouldn't be in quotes, but the direct quote was "stolen"

    2. Sixtiesplastictrektableware Bronze badge

      Re: "stolen"

      I get what you're saying, I just see it as the whole British-demure-euphemistic thing that I come to the site for.

      It's a nice break from all the north am crassness, and dude, I live in canada.

      Also, I suspect the demographic you're crusading against has no idea you, me, this site or its commentard denizens even exist.

      That said-- I for one am crestfallen that a ca-trillion-zillionaire cannot do whatever he wants. All is ashes, that the world has come to this.

    3. msobkow Silver badge

      Re: "stolen"

      There are medications and therapy available for mental illness...

      1. Anonymous Coward
        Anonymous Coward

        Re: "stolen"

        Yeah, but OP can't afford them under the US healthcare system, since their employer-supplied insurance doesn't cover the first $23,400 of the $23,450 per annum the manufacturers (who monopolised the production) have agreed with the insurance company that it'll cost.

        Shame there isn't a better healthcare system out there that isn't COMMUNISM!!!!!!111111, but there you go.

    4. Anonymous Coward
      Anonymous Coward

      Re: "stolen"

      "Stolen" was the claim, and it was made falsely. El reg don't have to take a stand, 50+ courts already ruled the Trump claims were bogus.

      Trump was thrown off Twitter after trying to get Mike Pence lynched for not going along with the coup. He is not a victim here, he is the primary perp.

      He freely went his way onto other networks, including his own, and people did not follow, apparently they don't care.

      Musk tried to turn over-valued Tesla shares into Twitter ownership, Tesla share price plummetted and he's trying to back out of the deal, adding extra conditions and generally get a discount. Tough, perhaps he should go buy "Truth Central" or "Trump Truthful" or whatever that shit is called.

      Musk's sudden love of Republicans, (my guess is late-disclosure of the shares in Twitter he accumulated caused an investigation, which caused his victimhood). But his recent sex allegations and his old 'pedo guy' accusations, also make me wonder if him and Matt Gaetz have more in common than being massive twats.

      1. Dog11

        Re: "stolen"

        > perhaps he should go buy "Truth Central" or "Trump Truthful" or whatever that shit is called.

        The name is translated from the original "Pravda".

    5. iron Silver badge

      Re: "stolen"

      Trump did indeed falsely claim the election was stolen. If he had accurately claimed the election was stolen then he would have won. Some lessons on English comprehension are advised.

      As for whether stolen should be in quotes or not... I'd suggest no because otherwise I'm going to cut your bloody fingers off but gramatically I don't really see an issue either way.

  2. Yet Another Anonymous coward Silver badge

    Genuine question

    Why are there complex rules like this for buyouts?

    Why aren't you just allowed to buy on the open market and then place your people on the board once you have 51%

    Then the free market will set the price that you pay, as people see the quantity of available shares remaining the price will rise without silly over the top bids.

    Perhaps just some rule that you can buy out the remaining shares at the current price once you reach some 51-75% ownership.

    1. EvilGardenGnome

      Re: Genuine question

      Well, just off the top of my head is to prevent covert purchasing. The price goes up more due to the consolidation into a single entity. If I have the means, I can set up a series of shells that each buy, say, 5% of the shares slowly over time. This appears like normal trading, preventing a large movement in the price. Once my shells have done that, I then purchase my own shells from myself and collect their stakes, centralizing power without a major price shift.

      By making a major takeover public you ensure the current holders of the shares get a proper value based on your desire rather than using clandestine means to keep the price low.

      1. Jim Mitchell

        Re: Genuine question

        We don't have rules about "covert buying" for physical goods, why have them for equity in a company? Buying land in a way that disguises the true final purchaser and their intent to combine the plots is a thing that is done.

    2. Gordon 10 Silver badge

      Re: Genuine question

      You are mixing up the financing of the buyout with the buyout itself. Musk has a financial house of cards he is juggling to produce the funding to buy enough of the publicly traded twitter shares to take it private.

      At a high level the buyout works exactly as you have articulated.

    3. DS999 Silver badge

      Re: Genuine question

      Perhaps just some rule that you can buy out the remaining shares at the current price once you reach some 51-75% ownership

      You want to force people to sell at a price they have no control over? Just because the stock is currently trading at x doesn't mean some people don't think it is actually worth 2x. They might be wrong, but it is their right to be wrong and refuse to sell at a price lower than 2x. There's a reason potential buyer always has to pay a premium over the share price to get enough shareholders to go along.

      If I buy 50% to 75% of the houses in your neighborhood would you be OK with being forced to sell to me at a price based on what I paid them? Or is it possible that perhaps you value living in that neighborhood more than some of your neighbors do, and would demand more money than them and might hold out for 50% more than your house is really worth on the logic "I've got a motivated buyer here who wants to own the whole neighborhood, so I'm going to hold out for more".

    4. bazza Silver badge

      Re: Genuine question

      The rules are there to stop market abuse.

      Here in the UK at least, a shareholder who builds up a big enough stake (>=90%?) is able to force acquisition of the remainder. This was used by the Glaser family to take complete ownership of Manchest United... I don't know what the rule says about "price" - it ought to be fair - but the minority shareholder(s) can be compelled.

      1. MachDiamond Silver badge

        Re: Genuine question

        "Here in the UK at least, a shareholder who builds up a big enough stake (>=90%?) is able to force acquisition of the remainder."

        At ~90%, you would have far more than a super-majority and laws may allow you to change the nature of how the enterprise is formed. Many times this is called "taking the company private". That can make sense in some situations if there is no benefit to the company to continue being traded on the public markets. It's very expensive to comply with all of the rules and requirements for a company to be publicly traded. One of the most common reasons a company does an IPO and sells shares to the public is so the founders and early investors can cash out for a fat profit. They will then take that money and look for the next opportunity (or buy more yachts, jets and mansions).

    5. ElRegioLPL

      Re: Genuine question

      You can, its called a hostile takeover

    6. MachDiamond Silver badge

      Re: Genuine question

      "Why aren't you just allowed to buy on the open market and then place your people on the board once you have 51%"

      You can do that and don't even have to own 51% unless you are really unpopular. Elon's stake in Tesla is twenty something percent and he controls it utterly. It helps that many people at the top are family or beholden to Elon for their fortunes.

      There is no problem buying shares on the open market if you like. If you wind up owning a significant percentage or plan to, it is required that your purchase intentions are made public through filings with the Securities and Exchange Commission (SEC). This is done to protect the other shareholders which often includes retirement funds and people not well versed in analyzing businesses. Big investors often get a reputation for what they do after they gain enough control of a company. Some are well known for chopping big companies to bits and selling off the bits. Others might be looking to amass a majority of a certain niche. Just look at Rupert Murdoch. It's not in nation's best interest to have major industries controlled by relatively few companies or individuals. Yes, it happens with a government blessing in some cases, but there are nuances to anti-trust laws. Trying to bring in more players to the electricity market is what led to Enron and many people losing their life savings.

      1. jmch Silver badge

        Re: Genuine question

        "You can do that and don't even have to own 51% "

        One other way is to chain some nested holding companies. You own 51% of a holding company that owns 51% of another holding company that holds 51% of the ultimately owned company. You can make the chain as long as you like, as long as you have at least 51% all the way down, you have ultimate control all the way down with a net of much less than 51% in the ultimately owned company.

        *In some cases company laws may require for example 2/3s instead of 50%+1 but the principle still holds

        1. julian.smith
          WTF?

          Re: nested companies

          Please provide an example from the S&P 500

    7. eldakka Silver badge

      Re: Genuine question

      Why are there complex rules like this for buyouts?

      Why aren't you just allowed to buy on the open market and then place your people on the board once you have 51%

      These rules only apply to publically traded companies. I.E. Those that list themselves on a public stock exchange and agree to the rules of that stock exchange - and the laws surrounding being listed on a public stock exchange in exchange for being listed. Don't want to comply to the stock exchange rules and/or laws that kick in when you become lsited on a stock exchange? Stay a private company. No-one's forcing a company to become public or to allow the shareholder threshold to be passed (private companies have a restriction on the number of shareholders they are allowed to have before being required to become public. Again this varies country-by-country, the US Securities Exchange Act of 1934, section 12(g), generally limits a privately held company to fewer than 500 shareholders. This happened to Facebook, they passed the US private-shaerholding limit and thus had to become public, but Facebook could have prevented passing that limit, they chose to allow that limit to be exceeded. ).

      Perhaps just some rule that you can buy out the remaining shares at the current price once you reach some 51-75% ownership.

      You can. It's called forced/compulsory aquisition of outstanding shares. It kicks in when the appropriate share vote threshold is reached on accepting the takeover. It's different in each country/stock exchange, however it's more like 90% shareholder approval (maybe it's 95%? or 92%? something like that, again depending on the rules of the country/stock exchange the company is listed on). Once this threshold is met, remaining shareholders shares are compulsorily aquired at the takeover price.

    8. julian.smith
      Paris Hilton

      Re: Genuine question

      "Why are there complex rules like this for buyouts?"

      So that lazy idiots can ask stupid questions on an IT forum?

  3. wolfetone Silver badge
    Happy

    Didn't I call this? Didn't I?

    I don't often get these things right, someone give me a pint!

    1. NoneSuch Silver badge
      Pint

      Here's your pint.

      And in the immortal words of Nelson from the Simpsons. "Ha-ha..."

      1. wolfetone Silver badge

        Excellent!

        *finger taps*

    2. eldakka Silver badge
      Coat

      > Didn't I call this? Didn't I?

      Calling is so old fashioned. It doesn't count unless you tweeted it.

  4. VoiceOfTruth

    Earth, May 2022

    The world hangs on every word of Elon Musk.

    1. nagyeger
      Joke

      Re: Earth, May 2022

      Don't worry, once the noose gets a bit tighter it'll stop kicking.

      Oh. Maybe we should worry.

    2. Sixtiesplastictrektableware Bronze badge

      Re: Earth, May 2022

      Oh jeez, don't encourage the guy.

    3. Blank Reg Silver badge

      Re: Earth, May 2022

      Typically I just laugh at every word of Elon Musk and say "what an idiot"

  5. Brewster's Angle Grinder Silver badge

    He hasn't even got the keys to the boardroom, and his plans are already in tatters. It doesn't bode well does it?

    [We need an icon that's a shark bite in a surfboard. No, mate, it's not a seal; it's fibreglass and foam.]

  6. msobkow Silver badge

    Good - the more it costs him to give Drumpf a platform, the better.

    1. hoola Silver badge

      It couldn't be happening to a better person.......

      As you say the more it costs him the better, particularly if it is his money or from assets he has a hand in and has to sell.

    2. Lazlo Woodbine Silver badge

      The Donald has a platform, it's just that nobody, including himself, use it...

    3. Steve Davies 3 Silver badge

      re: give Drumpf a platform

      Drumpf has a platform... Truth Social. According to him, it is where all the action is and Twitter is a desert.

      (since when had Drumpf ever been known to tell the truth eh?)

      He's about to make about $100M from the deal that set it up at the expense of all the small trumpers/MAGA supporters who invested in it... and saw their investments become almost worthless overnight.

  7. John Brown (no body) Silver badge

    If "Musk" does eventually buy Twitter...

    ...then who will actually own it if he's bringing in all these extra high spending investors? Will he personally own or control 51% or not?

    1. Anonymous Coward
      Anonymous Coward

      Re: If "Musk" does eventually buy Twitter...

      He's said that he will only stay on 'board' until he can 'fix' the shithole that he thinks Twitter has become since No 45 was ejected. Then he'll IPO it and make a crapload of money from even more idiots who hang on his every word... As good Cult members, it is expected that you:-

      - Drive a Tesla (or more)

      - Have at least one Tesla Powerwall in your home

      - Have Tesla solar panels or tiles on your roof

      And

      - pray to Elon every night before you go to bed.

      - Not allow anyone to say anything against the 'Dear Leader' even if it is in jest.

      1. Flocke Kroes Silver badge

        Re: If "Musk" does eventually buy Twitter...

        One reason Tesla was overvalued because Musk fans were buying and not selling. If Musk fans are not Trump fans...

    2. iron Silver badge

      Re: If "Musk" does eventually buy Twitter...

      The Saudis, the Chinese and the Russians probably.

      Ok maybe not the last one but the first two are involved so you can guarantee Elon's freeze peach doesn't include tweets about Jamal Khashoggi or events in Tiananmen Square in 1989. Or any of the other many human rights abuses inflicted on their own people and others by the governments of Saudi and China.

    3. eldakka Silver badge
      Happy

      Re: If "Musk" does eventually buy Twitter...

      > Will he personally own or control 51% or not?

      That depends entirely on the agreements he has with each of those investors. For example, even though an investor might purchase 10% of the company, the agreement with Musk could be that he has a perputual exclusive proxy on those votes, and that the investor cannot sell them without his approval and/on passing on that proxy obligation to the buyer.

      Unless you can view all of those individual contracts, then I'm pretty sure the answer is: NFI.

  8. Jos V

    Dilbert

    Not always a fan of it, but Dilbert's latest days have been Musk

    1. Potemkine! Silver badge

      Re: Dilbert

      +1

    2. Jaybus

      Re: Dilbert

      Btw, Scott Adams has a few hundred thousand followers on Truth Social.

  9. DenTheMan

    Soon we will all wake up...

    ..and realise that it was just an accidental fart with a strong smell of Musk.

    The billion dollar trump....., next on Netflix UK.

  10. anothercynic Silver badge

    He's already being sued...

    ... Twitter shareholders are not happy, they accuse him of stock price manipulation. They claim that through this sale thing and the drama surrounding it is costing them money. I suppose they'll go away once he does and has to pay Twitter a billion.

    1. GruntyMcPugh

      Re: He's already being sued...

      Oh yeah baby, he is: https://www.bbc.co.uk/news/business-61589229

      Oh, and then there's this: https://www.bbc.co.uk/news/world-us-canada-61526898

      Stick a fork in him, he's done.

  11. sreynolds Silver badge

    Maybe he can offload his weed assets?

    Why didn't he just buy a media outlet like Bozos if he wanted to get his views our there?

  12. Winkypop Silver badge
    Facepalm

    And to think

    People actually invest real money in Musk’s musings.

    Then I suppose some also support Trump’s nutjobbery too.

    There’s nowt as funny as folk.

  13. Dylan Fahey

    Busted !

    Just search for Musk Busted on youtube and you'll be pleasantly entertained. HyperFlop, Electfuge Trucks, Boring Tunnels on the cheap. This charlatan Musk must go. He's an expert on getting government tax breaks and grants, nothing more. He also can entice politicians into giving him hard earned tax money from the citizens to some of his dream projects.

  14. julian.smith
    Mushroom

    The Twit Musk

    In the background the sale process continues (see Matt Levine at Bloomberg for details)

    All of the "pause" stuff is an irrelevant smokescreen

    The delightful reality is that:

    - he is committed to a purchase at $54 that now sells for $37 (ouch!)

    - he personally has to find $35 billion

    - the additional interest costs are of the order of $1 billion

    - Twitter is not that profitable, it's a dud investment

    The capital loss is staggering

    As Warren Buffett noted "a billion here, a billion there ... after a while it adds up"

    BTW I note that Buffett has not put his hand up to join the financing

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