Elon Musk Races to Secure Financing for Twitter Bid

The world’s richest man is trying to shore up debt financing, including potentially taking out a loan against his shares of Tesla, so he can buy Twitter.

By Lauren Hirsch @ NYTimes.com,April 19, 2022Updated 7:05 p.m. ET

Elon Musk is racing to secure funding for his $43 billion bid to buy Twitter.

Morgan Stanley, the investment bank working with Mr. Musk on the potential deal, has been calling banks and other potential investors to shore up financing for the offer, four people with knowledge of the situation said. Mr. Musk is first focused on raising debt and has not yet begun to seek equity financing for his bid, one of the people said.

Mr. Musk is evaluating various packages of debt, including more senior debt known as preferred debt and a loan against his shares of Tesla, the electric carmaker that he runs, two of the people said. Apollo Global Management, the private equity firm, is among the parties considering offering debt financing in a bid for Twitter. The equity he needs is likely to be sizable.

Mr. Musk is aiming to pull together a fully funded offer as soon as this week, one of the people said, though that timeline is far from certain. The people with knowledge of the discussions were not authorized to speak publicly because the details are confidential and in flux.

It is unclear if Mr. Musk’s efforts will be successful, but they go toward addressing a key question about his Twitter bid. Last week, Mr. Musk, the world’s wealthiest man, made an unsolicited offer for the social media company, saying that he wanted to take it private and that he wanted people to be able to speak more freely on the service. But his offer was regarded skeptically by Wall Street because he did not include details about how he would come up with the money for the deal.

While Twitter’s board has not rejected Mr. Musk’s offer, it responded days later with a defensive tactic known as a “poison pill.” A poison pill would effectively prevent Mr. Musk from owning more than 15 percent of Twitter’s shares. The 50-year-old had been building up a stake in the company and owns more than 9 percent of Twitter, making him its single-biggest individual shareholder.

Mr. Musk, whose net worth has been reported at $255 billion, did not respond to a request for comment. On Tuesday, in what appeared to be a veiled allusion to Twitter, he tweeted his thoughts about social networks and their policies.

 

A social media platform’s policies are good if the most extreme 10% on left and right are equally unhappy

— Elon Musk (@elonmusk) April 19, 2022

 

Morgan Stanley declined to comment. Twitter, which also declined to comment, is expected to provide an update on its deal-making prospects when it reports quarterly earnings on April 28.

Tesla did not return a request for comment. It is unclear how Tesla’s shareholders will regard Mr. Musk's move to potentially take out a loan against shares of the company; some of its largest shareholders declined to comment. The automaker will report quarterly earnings on Wednesday. Mr. Musk often speaks during Tesla’s earnings call with investors. [....]

while I still mistakenly often think of him as a smart kid, he's actually got a ton of experience in this now, so here's Yglesias' two cents on the big picture: