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Elon Musk and Twitter Inc. reached an agreement, to make the world’s richest person buy the social networking platform for $44 billion or equivalent to Rp635 trillion. Where’s the money from? Photo/Doc
But on Musk’s part, there’s still a mystery: How will he cover the $21 billion equity portion of the deals he personally underwrites?
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Musk, now 50, has outlined that $13 billion through bank financing and $12.5 billion from a portion of Tesla Inc. his $170 billion. But Musk gave no details on how he would fund the rest.
The deal includes a stipulation that the billionaire must pay a so-called reverse termination fee if he wants to leave or the deal doesn’t work out as it should, as reported by Bloomberg News.
In the end there is little doubt that Musk can make money. Musk does hold the title of the richest person in the world, with a net worth of $257 billion, according to the Bloomberg Billionaires Index.
However, Musk only has about $3 billion in cash and somewhat liquid assets, according to Bloomberg estimates. These conditions provide several options, about how Musk buys Twitter:
– Other Investors
One avenue for Musk is to find like-minded investors who buy into his vision for Twitter, and join him in the purchase. That means a portion of the equity portion comes from new or existing shareholders.
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