L’the richest man in the world could also be… the most indebted. As BFMTV reports, Elon Musk, who will buy Twitter for 44 billion dollars, or just over 41 billion euros, should see his debts skyrocket since he does not have this staggering amount of equity.
The news channel points out that the boss of Tesla has taken out several bank loans to the tune of 13 billion dollars to complete the takeover of the social network. The one whose heritage is estimated today at 250 billion dollars will then have to repay his colossal loans with the profits of Twitter, according to the documents sent to the SEC, the policeman of the American stock market.
To raise the 44 billion dollars necessary for this acquisition, Elon Musk will draw 21 billion dollars from his personal fortune, probably thanks to the sale of Tesla shares. Finally, the multi-billionaire also plans to make a final personal margin loan of $12.5 billion, also with Tesla shares as collateral. In total, the future owner of Twitter would have pledged $ 62.5 billion in Tesla shares to cover his loan. Unheard of in global capitalism for one and the same person.
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A proliferation of companies difficult to manage
According to Audit Analytics, Elon Musk had more than $90 billion in pledged stock before the Twitter takeover, making him the largest US stock debtor, far ahead of Oracle Corporation co-founder Larry Ellison, and its $24 billion.
Once the loans for the takeover of Twitter are contracted, the total amount of pledged shares of Elon Musk should reach 140 billion dollars according to Forbesmore than half of all pledged stocks in the United States ($271 billion) and after 60% of his personal wealth.
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Nevertheless, the markets are expressing doubts about the financing of the operation in the face of its astronomical debts, but also about the capacity that Elon Musk could have to manage five companies at the same time. Twitter would indeed be added to Tesla, SpaceX, Neuralink and The Boring Company. “I’m not going to say if Elon Musk is capable of it, because he could be a superhuman, but, in general, this excessive commitment can create a challenge for shareholders,” predicts Frank of ISS Corporate Solutions in Forbes.