Highlights

  • Twitter takeover is a $44 billion all-cash deal
  • Musk has pledged to finance $21 billion by himself

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Elon Musk to buy Twitter; where is the cash coming from

Musk is worth over $280 billion but most of his 'money' is tied up in Tesla, SpaceX stocks.

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?

Also read/watch | Elon Musk's Trinity: Twitter, Tesla and SpaceX, but there is Boring and Neuralink too

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.

Also read/watch | LIC IPO downsized: Size, price, value all see bit cuts

Also Watch/Read: Elon Musk networth down by nearly $40 billion since Twitter tales began

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