Does Elon Musk really have the money to buy Twitter? The question seems bizarre as the new media mogul has to put up $21 billion out of the $44 billion in cash and is himself worth more than ten times that. But the planet's richest is also cash-poor, with most of his 'value/wealth' tied up in Tesla and SpaceX stock.
Bloomberg estimates show that the 50-year space and EV enthusiast has just over $3 billion in cash. So the big question as Elon Musk takes over Twitter for $44 billion in a cash deal is - Where is the money?
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Let us break this down: Musk says he’s pledging $21 billion of his own money and will likely sell a chunk of Tesla stock to raise those funds. Banks will lend him $12.5 billion, which will also be backed by an additional $62.5 billion of his Tesla shares. Final funding of $13 billion will be in debt that Twitter will take on.
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Even though the Twitter stock rallied after the announcement of Musk's buyout many believe the deal is overvalued as the price remained lower than Musk's $54.20 per share offer. Musk has said he doesn't "care about the economics" of the purchase and rightly so as it doesn't add up.
Despite its influence, Twitter has rarely turned a profit and user growth, particularly in the U.S., has slowed. The company, founded in 2004, ended 2021 with $5 billion in revenue and 217 million daily users globally - significantly lower than peers such as Facebook.
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