Elon Musk after all introduced the Twitter deal on maintain due to faux accounts:
https://version.cnn.com/2022/05/13/tech/twitter-deal-on-hold-elon-musk/index.html
Hilarious such a worth delicate announcement to Twitter inventory introduced on Twitter, and that Tesla been proven to be a serial offender with bots on Twitter:
https://www.latimes.com/enterprise/story/2022-04-12/musk-is-off-the-twitter-board-of-directors-the-tesla-twitter-bot-army-marches-on
…however I digress.
The truth, is that with Tesla inventory buying and selling in the direction of $700 earlier than the announcement, Musk was over-leveraged each by the debt convenants on the $12.5 million mortgage and Tesla’s personal debt to excellent fairness limits – no shock he’s now making an attempt to switch that with various financing:
https://www.bloomberg.com/information/articles/2022-05-12/musk-seeks-to-scrap-tesla-margin-loan-with-new-twitter-funding
(little question Tesla fanbois’ will declare this a large coincidence)
While nearly all of Musk obsessed media simply repeats what they’re fed, just a few have been awake to the huge over-leveraging, not simply by the debt covenants, but additionally by the truth that Tesla by-laws solely allowed him as CEO to carry debt of 25% of the worth of his excellent shares towards them – their math slightly off, however not less than on the precise path:
https://www.washingtonpost.com/enterprise/2022/05/02/elon-musk-twitter-financing-flawed/
There have been an incessant variety of errors made on this takeover deal:
https://www.reddit.com/r/know-how/feedback/unxmf4/the_sec_is_investigating_elon_musk_over_his_late/
I did cowl the maths in a earlier publish, however acquired little consideration, because it was not adoring of Musk after all:
https://www.reddit.com/r/wallstreetbets/feedback/ucyy4p/musk_is_overleveraged_for_twitter_deal/
Shorting Twitter above $50 was an apparent play when the deal particulars emerged – the possibility did not final lengthy as critical traders started to understand Musk was over-leveraged.
Tesla shares have bounced as many traders realise the literal compelled promote down of Tesla inventory Musk was going through with the inventory within the low $700’s by the debt covenants, the 25% debt to holdings Tesla rule and even the precise margin mortgage at round. The $ thresholds have dropped slightly since my authentic article as Musk offered $8.5 billion Tesla shares to fund the deal. As has been reported within the latest weeks as nicely Tesla’s disclosure of Musk share possession have been proven to be old-fashioned.
