Twitter goes private. What now?

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#21

And if he gets called, after a high selloff? (TSLA is known for its high volatility, many provoked by Musk itself.)

I suppose it’s overcollateralized. Or maybe not, and if it isn’t at least 100% collateralized, there will be a high leverage factor.

A lot of leveraged investors (giving shares as collateral) get burned. The last known whale, Hwang/Archegos Capital Management, had a huge impact in his family office and in the investment banks that allowed his leveraged trades (today, Hwang was arrested).

#22

Tesla MCAP is about 900bn, Musk owns what 17% so 150bn say, but news says Musk is worth 264bn, so borrowing 50bn against that doesn’t seem so bad…

#23

We don’t know if Musk have given some stocks as collateral on other previous situations. :wink:

For example, to finance his other projects and even to buy meme cryptos.

Net worth isn’t necessarily 100% accepted as collateral. As lenders can refuse some types of collateral. (E.g. having a loan and giving cryptos as collateral or if accepted, as it is very volatile, the lenders could demand a higher overcollateralization. Or for example, other iliquid or exotic assets given as collateral.)

Bottom-line. Musk could be worth 264bn, but lenders only accept a % of it as potential collateral (not considering/accepting some as collateral).

EDIT:
PS: Banks have regulations that classifies their balance sheet assets according to their risk, with risky assets penalizing the banks’ capital requirements/stress tests.

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#24

Looks like this is on hold…
Elon Musk on Twitter: “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users https://t.co/Y2t0QMuuyn” / Twitter

Good example that you can’t assume anything until all the paperwork is signed.

#25

dude I swear, if this doesn’t get through…

I’m tired of losing money :smiley:

#26

5% is still a pretty big number all things considered. did he think it was more? I don’t know much details about elon’s twitter interest saga haha

#27

Could also be that as the market is crashing he’s having a rethink about paying too much and wants out :thinking:

#28

Afaik, it was disclosed thah below 5% of twitter accounts were fake, by the board/internal report. However it seems likely that number is more then claimed 5%…

#29

Does it slightly annoy you that Musk has become bigger than both TWTR (and also TSLA). Both have become what I now call “celebrity stocks”. The man himself has become a bigger spectacle than the actual companies.

That said I know many will gain a decent profit once the sell off takes place, myself included.

#30

It’s seem like Musk would rather find a way to get out of this deal, pay the 1million get out clause and offer a lower share price for the company purchase.

#31

I believe its a 1 Billion get out clause.

He’s right to make sure Twitters numbers are correct. The real amount of bots and fake accounts will obviously turn out to be far more than they said, lowering the value.

Personally i think he’s opening a can of worms with this one.

#32

Yooo cheqp twitter brooo, make millionz, lambooo

Or maybe not. Nobody knows.