Photo: Billy Lam/National Geographic/Twitter/edited by autoevolution
After Elon Musk closed the deal to buy Twitter to prevent being forced to do so, a massive question mark was still left behind: how did he fund that? There were some calculations about that, but he was expected to sell more Tesla stock than he already had in August. Bingo: new Form 4s filed with the U.S. Securities and Exchange Commission (SEC) revealed he sold 19.5 million more shares for a total of $3.95 billion.
The Form 4 filings state that Musk sold 9.65 million shares on November 4 for prices between $203.67 and $219.91 per share. That helped the billionaire raise $2.013 billion. On November 7, he sold 5.45 million more shares for prices between $197.20 and $208.73. That put $1.93 billion more in his wallet. On November 8, Musk got rid of 4.4 million more shares for prices ranging from $189.58 to $197.7. That gave the billionaire $8.432 billion more to pay Twitter.
Reuters calculated that the Twitter deal cost Musk more than the $44 billion he committed to pay. Closing costs added $2.5 billion more to that bill, for a $46.5 billion total. Morgan Stanley and the Bank of America financed around $13 billion in debt, leaving $33.5 billion yet to cover.
Musk added the 9.6% he had purchased on Twitter – worth $4 billion – and the $7.1 billion he raised with equity investors such as Larry Ellison and the Saudi Prince Al Waleed bin Talal. The Tesla CEO still had $22.4 billion to pay. Reuters estimated that previous stock sales left Musk with around $20 billion. That said, he would need to raise $2.4 billion more to cover his Twitter expenses. If that was correct, Musk sold even more shares than he should have.
The problem is Musk's debt to Morgan Stanley and the Bank of America. The Financial Times said the precise value is $12.7 billion, which increases the amount the billionaire had to raise to $2.7 billion. Also, according to the newspaper, the two banks will only ask for that money back from the Tesla CEO in 2023.
If Musk only wants to finish the purchase, he may wait a bit longer to sell Tesla shares and pay the banks. He may also decide this is the perfect time to get more money from Tesla’s shares and dump them as soon as possible. After all, the company is yet to deliver new products, is under investigation by several government entities, and is being sued for multiple reasons, from racism to issues with Autopilot and Full Self-Driving. Whatever Musk does next will be very telling.
Reuters calculated that the Twitter deal cost Musk more than the $44 billion he committed to pay. Closing costs added $2.5 billion more to that bill, for a $46.5 billion total. Morgan Stanley and the Bank of America financed around $13 billion in debt, leaving $33.5 billion yet to cover.
Musk added the 9.6% he had purchased on Twitter – worth $4 billion – and the $7.1 billion he raised with equity investors such as Larry Ellison and the Saudi Prince Al Waleed bin Talal. The Tesla CEO still had $22.4 billion to pay. Reuters estimated that previous stock sales left Musk with around $20 billion. That said, he would need to raise $2.4 billion more to cover his Twitter expenses. If that was correct, Musk sold even more shares than he should have.
The problem is Musk's debt to Morgan Stanley and the Bank of America. The Financial Times said the precise value is $12.7 billion, which increases the amount the billionaire had to raise to $2.7 billion. Also, according to the newspaper, the two banks will only ask for that money back from the Tesla CEO in 2023.
If Musk only wants to finish the purchase, he may wait a bit longer to sell Tesla shares and pay the banks. He may also decide this is the perfect time to get more money from Tesla’s shares and dump them as soon as possible. After all, the company is yet to deliver new products, is under investigation by several government entities, and is being sued for multiple reasons, from racism to issues with Autopilot and Full Self-Driving. Whatever Musk does next will be very telling.
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