Musk’s $8.5 Billion Tesla Stock Sales Make Math Behind Twitter Deal More Tricky

 
image

(Bloomberg) — Elon Musk’s sale of more than $8.5 billion of Tesla Inc. shares has made the math behind his $44 billion deal to buy Twitter Inc. a bit more tricky.

To acquire the social-media company, Musk has lined up $13 billion in bank financing, $12.5 billion in margin loans backed by Tesla shares and committed a further $21 billion himself.

Before his most recent share sales, the Tesla co-founder had about $3 billion in cash and investments to cover that $21 billion commitment, according to Bloomberg calculations. The recent disposals bring that total to about $11.5 billion.

But as a result of the trades, Musk has fewer shares to cover his margin loan, which has an initial loan-to-value ratio of 20%. That means he’ll need to post Tesla shares worth $62.5 billion when it’s funded.

He now has 163 million shares remaining worth about $146 billion, though more than half are already pledged to secure existing personal debt, according to Tesla’s most recent proxy statement. If the electric carmaker’s share price drops under $837 — or about 7% below where it is currently — he won’t own enough stock to secure the loan. The shares traded as low as $821.70 as recently as Thursday.

The calculations assume he can’t post shares related to Tesla options because the collateral needs to be “free of any lock-up or selling restrictions,” according to a filing. The options he owns convert to shares that can’t be sold for five years.

Musk has said that he’s trying to convince new or or existing equity investors to join him in the Twitter deal. If successful, that reduces the amount he needs to contribute.

Musk said in a tweet Thursday that he has “no further Tesla sales planned after today.” But he still has time to submit more regulatory filings if additional sales took place that day.

©2022 Bloomberg L.P.

 
Trending Ideas
  • 2 Stocks Pioneering Change in Gaming and Energy

    January 6, 2025

    The online gaming and advanced battery technology industries are driving significant innovations in entertainment and energy storage. Rush Street Interactive, Inc. (RSI) is a leader in online gaming, offering platforms... Read More

  • 3 Stocks Transforming How We Connect, Eat, And Fly

    January 6, 2025

    The telecommunications, hospitality, and airline industries are witnessing significant transformation fueled by consumer demands and technological advancements. Ceragon Networks Ltd. (CRNT), Cracker Barrel Old Country Store, Inc. (CBRL), and Frontier... Read More

  • 2 Stocks Transforming Healthcare and Automotive Innovation

    January 5, 2025

    The biotechnology and AI-driven automotive solutions industries are revolutionizing healthcare and transportation through innovation. Eledon Pharmaceuticals, Inc. (ELDN) is advancing biotechnology with its focus on immunology treatments for organ transplant... Read More

  • 2 Stocks Leading the AI and Clean Energy Revolutions

    January 4, 2025

    The AI computing and energy transition industries are reshaping the global economy through cutting-edge innovation and sustainable practices. NVIDIA Corporation (NVDA) stands as a leader in AI computing, providing advanced... Read More

  • 2 Stocks Positioned for Major Growth in Clean Energy

    January 3, 2025

    The energy utility and advanced nuclear technology industries are pivotal in driving the global transition to cleaner and more sustainable energy solutions. Vistra Corp. (VST) plays a key role in... Read More

  • 3 Stocks Reshaping How We Power And Connect The World

    January 3, 2025

    The nuclear energy, space data analytics, and electric aviation industries are at the forefront of groundbreaking innovation, addressing pressing challenges and opportunities in energy, information, and transportation. Oklo Inc. (OKLO),... Read More

  • Why Ranger Energy and Quantum-Si Are Stocks to Watch

    January 2, 2025

    The energy services and biotechnology industries are crucial for advancing infrastructure and healthcare innovation. Ranger Energy Services, Inc. (RNGR) plays a pivotal role in providing well completion and production solutions... Read More

  • 3 Stocks Reshaping Trade, Finance, And Real Estate

    January 2, 2025

    The global trade logistics, financial technology, and real estate services industries are experiencing rapid evolution as companies embrace innovative solutions to meet shifting market demands. Caravelle International Group (HTCO), OppFi... Read More



Featured Stocks On The Move

Daily Rundown

Top 3 Stocks in Leading Sectors
  • 3 Finance Stocks To Buy Now

    FS KKR Capital Corp. (FSK) FS KKR Capital Corp. is a business development company providing customized credit solutions to middle-market businesses. Through its diversified investment portfolio, the company supports growth... Read More

  • 3 Dental Stocks To Buy Now

    LifeVantage Corporation (LFVN) LifeVantage Corporation is a wellness company specializing in nutrigenomics and dietary supplements. Offering innovative products designed to optimize health and longevity, LifeVantage combines science and wellness to... Read More

  • 3 Technology Stocks To Buy Now

    Priority Technology Holdings, Inc. (PRTH) Priority Technology Holdings, Inc. delivers payment processing and commercial payment solutions. The company focuses on empowering businesses with secure, efficient, and customizable financial services for... Read More

  • 3 Apparel Stocks To Buy Now

    Tapestry, Inc. (TPR) Tapestry, Inc. is a leading luxury goods company that owns iconic brands like Coach, Kate Spade, and Stuart Weitzman. Focused on craftsmanship and innovation, Tapestry designs high-quality... Read More

  • 3 Commercial Service Stocks To Buy Now

    Remitly Global, Inc. (RELY) Remitly Global, Inc. is a leading digital financial services provider specializing in international money transfers. With a customer-centric platform, Remitly simplifies cross-border payments, ensuring secure, fast,... Read More

  • 3 Aviation Stocks To Buy Now

    United Airlines Holdings, Inc. (UAL) United Airlines Holdings, Inc. operates as one of the largest airlines globally, offering comprehensive domestic and international travel services. With a focus on innovation and... Read More

  • 3 Consumer Stocks To Buy Now

    XPeng Inc. (XPEV) XPeng Inc. is a leading electric vehicle manufacturer in China, specializing in smart EV technology. The company focuses on autonomous driving, advanced connectivity, and energy efficiency to... Read More

  • 3 Communication Stocks To Buy Now

    AudioCodes Ltd. (AUDC) AudioCodes Ltd. provides advanced communication technologies, focusing on Voice over IP (VoIP) and unified communications solutions. The company serves enterprises and service providers worldwide, enabling efficient and... Read More