Elon Musk and Twitter Inc. reached an agreement for the world’s richest man to buy the social networking platform for $44 billion.
On Musk’s side, though, there remains a mystery: How is he going to cover the $21 billion equity portion of the transaction that he’s personally guaranteed?
Musk, 50, has outlined the $13 billion in bank financing secured by the social-media company and the $12.5 billion backed by a pledge of some of his $170 billion Tesla Inc. stake. But he’s been short on details about how he’ll fund the remainder.
There’s little doubt he can come up with the money. Musk is the world’s richest person, with a fortune of $257 billion, according to the Bloomberg Billionaires Index. However, he has just about $3 billion in cash and somewhat liquid assets, according to Bloomberg estimates.
One path for Musk is finding like-minded investors who buy into his vision for Twitter to join him in his purchase. That would mean some of the equity portion comes from new or existing shareholders.
Even if Musk can’t round up many other equity investors, he has the financial firepower to go at it mostly alone, thanks to the crown jewel of his enormous fortune: His stake in Tesla.
Musk said in July he owned Bitcoin, Ether and Dogecoin. While it’s not clear how much he holds or for how long he’s owned them, the first two cryptocurrencies have gained about 720% and 2,600%, respectively.
Since March 2020, a much steeper rally than the roughly 90% advance in the S&P 500 Index. Dogecoin, meanwhile, surged almost 30% on Monday after Musk agreed to buy Twitter.
ELON MUSK LANDS DEAL TO TAKE TWITTER PRIVATE FOR ROUGHLY $44 BILLION