Financing of a billion deal
Musk wants to cut salaries for Twitter bosses
4/29/2022, 6:14 p.m
For the billion-dollar takeover of Twitter, Elon Musk has to take out loans from several banks. In order to pay them back, the Tesla boss apparently wants to cut back on the salaries of Twitter executives. Musk’s plans could also have direct consequences for users.
According to insiders, Elon Musk wants to make the $44 billion Twitter purchase a financial success as quickly as possible. He told banks funding the acquisition that he could cut executive salaries and find new ways to monetize tweets, three people familiar with the matter told Reuters.
That was part of his pitch to financial institutions in order to secure sufficient funds for the billion-dollar purchase. Ultimately, Musk got a $13 billion loan backed by Twitter shares and a $12.5 billion loan backed by Tesla stock.
Musk wants to raise the rest of the purchase price from his own funds. Much of Musk’s fortune is in Tesla stock. As can be seen from stock market documents, Musk has sold 9.6 million Tesla shares since Tuesday, with a total value of around $8.4 billion (almost 8 billion euros). He therefore still holds almost 163 million Tesla shares. The sale of the shares should serve to finance the purchase of Twitter.
Only visions instead of concrete proposals
According to insiders, the Tesla boss wooed the banks with a vision rather than concrete proposals. The exact savings potential is unclear. However, the 50-year-old pointed out that competitors such as Facebook owner Meta and Pinterest have better gross margins than Twitter.
Musk has also expressed ideas in several tweets about how the US short message service could be changed, citing, for example, the fee-based subscription offer Blue.
On Monday, the world-renowned company with more than 217 million users agreed to the purchase offer in the amount of 44 billion dollars. Musk wants to take the 16-year-old company private.