The soap opera about the takeover of the social network Twitter by Elon Musk, the violent billionaire boss of Tesla and Space X, has just experienced a new episode. Elon Musk announced that he received new direct commitments that allowed him to further reduce by 6.25 billion the amount of loans taken on the purchase of Blue Bird for $44 billion. Tesla’s CEO, who originally signed up for $25.5 billion in loans, has reduced those loans to $13 billion, according to a US Market Authority (SEC) filing, greatly easing his financial burden.
Something to reassure investors. Indeed, the $12.5 billion in loans that will eventually not be needed have some analysts worried because they were securities-backed loans from automaker Tesla. This operation was perceived by the market with the evil eye because it created a connection with the car manufacturer. And when it comes to finance, we don’t like to mix genres… On Tuesday, Twitter’s share price fell to $35.40, 35% less than the price officially offered by the fiery entrepreneur in mid-April.
This time, with these new direct commitments, which are not specified whether they come from the billionaire’s personal assets or other investors participated in the round, investors see it as Elon Musk’s desire to complete the deal. Especially since the Tesla boss indicated he was in talks with several people, including co-founder and former CEO Jack Dorsey, to rally them on the project and get their input either in cash or Twitter shares. which can further reduce the amount of the loan.
+5% on Wall Street
For investors, we seem to be moving away from the episodes when Elon Musk blew hot and cold. Since the disclosure of Elon Musk’s stake in Twitter in early April, the group has lived in the rhythm of many vicissitudes of the case. Just last week, Elon Musk, in particular, announced that he was suspending the operation because he wants to make sure that “spam and fake accounts really make up less than 5% of the number of users.” Before you reiterate your desire to acquire a social network. Twitter boss Parag Agrawal spoke about the measures taken by the social network to combat fake accounts. Elon Musk responded with several messages, including a simple poop emoji that laughs but says it wants to be a customer.
This time, with this change in the financial structure for this takeover, investors may believe that we are approaching the epilogue with the takeover of the social network by a billionaire. Following this announcement, the shares of the Blue Bird Group rose sharply in trading after the Wall Street close with a good gain of about 5%. But beware, Elon Musk can still change his tune at lightning speed. What is not said is that he won’t be trying out new poker moves in the coming days to try and bring down the final price of Twitter.
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It also remains to be seen the choice of the current shareholders of Twitter. If Elon Musk says he wants to make the platform a bastion of free speech to break with the sentiment created by Republicans in the United States and fueled by former President Donald Trump that the American right is being censored by social media, shareholders will have to vote on this takeover project on extraordinary general meeting, the date of which has not yet been set.