“A simple personality conflict, it does not disqualify an offer,” said Mr. Pascarella. “But if they’re linking Elon’s personality traits to deal prospect — can you come up with the cash, and will the deal actually close — then a lot of it can be taken into account.”
Mr. Musk is the richest person in the world, with a net worth estimated at north of $200 billion. But his wealth is mostly tied up in Tesla stock. As Tesla’s chief executive and one of its largest shareholders, Musk owned about one-fifth of the electric carmaker as of December. But Tesla doesn’t limit its executives to using more than 25 percent of its stock as collateral for borrowing, and Mr. Musk has already used his Tesla shares for other loans, according to the company’s filing. A part has been mortgaged.
He could theoretically pledge his remaining eligible Tesla shares to raise enough money to buy Twitter. But Tesla remains a wildly volatile stock, trading between $766 and $1,145 in a matter of weeks – which would give banks pause considering Musk lending against his Tesla holdings.
Analysts say Mr. Musk could also go to banks to help with $15 billion to $20 billion in debt financing, necessitating a bid, which will be added to Twitter’s balance sheet. But Morgan Stanley, the investment bank that Mr Musk is advising, isn’t known on Wall Street for pulling together the massive financing needed for Twitter’s purchase.
Morgan Stanley could join banks with larger balance sheets such as JPMorgan Chase and Bank of America. But a tense history between JPMorgan and Mr Musk could force the bank to sit out. Last year, JPMorgan sued Musk over a misleading Twitter post in which he claimed to have received funding for his proposal to take Tesla private, alleging it violated the terms of the contract between the two entities. has done.
JPMorgan declined to comment.
The third option for Mr. Musk is private equity. When he considered taking Tesla private in 2018, he famously brought in the services of Silver Lake, a technology-focused private equity firm. Silver Lake already has a connection to Twitter. The firm’s co-CEO Egon Durban joined Twitter’s board in 2020 following a $1 billion investment by Silver Lake.
But there’s also a catch. When it invested in Twitter, Silver Lake signed a deal that severely limits its ability to acquire more than 5 percent of the company. That agreement could hinder his willingness or ability to team up with Mr. Musk.
