Blunted risk

25 Apr 2022 By Liam Proud Follow @liamwardproud

The bank is leading a $13 bln debt package for Elon Musk’s buyout and lending $12.5 bln against his Tesla stock. Interest will eat up the social network’s cash flow and Musk may undermine its revenue. A good relationship with the world’s richest man may justify the risk, though.

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Twitter is poised to agree a sale to Elon Musk for around $43 billion in cash, Reuters reported on April 25, citing people familiar with the matter.

Musk said in a securities filing on April 21 that he has lined up $46.5 billion in financing to buy Twitter. Tesla’s chief executive, who has offered to buy the social network for $54.20 per share, already owns over 9% of the company.

Morgan Stanley and other banks have committed to providing $13 billion in loans. The investment bank and other lenders have also agreed to provide $12.5 billion in margin loans to Musk, secured against his stock in the electric-car maker. Musk has committed to cover the remaining amount, including fees, which is estimated to be $21 billion.

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