$44 Billion Was The Cost Of Elon Musk Acquiring Twitter – How Can He Afford It?
Dethroning Amazon founder Jeff Bezos for the first time in the past four years, Elon Musk has secured the position of world’s richest man in 2022, according to Forbes magazine. It comes as a surprise to many since just in 2020, he ranked 35th on the same list, and it’s unheard of to rise up the ranks of this prominent index so quickly. The many reasons for this giant leap are discussed ahead in this article, so read along.
This very triumph in recent years has allowed Musk to acquire Twitter, the social media goliath. Although this is not an overnight decision, it was not very public knowledge until January 2022. It started with Musk disclosing in April that he had a 9% stake in the company, making him the largest singular entity to be a shareholder, this soon sparked rumours of his future plans for the social media giant. After a lot of back & forth, some lawsuits, boardroom drama, social media theatrics and the opportune availability of secured financing, Elon Musk was finally able to buy Twitter for $44 Billion ( approx. Rs. 3,372 Billion). The company officials weren’t always on board with the idea of Musk buying it, however, with the viability of secured financing as an option, the doors to Musk’s Twitter opened.
Per Forbes, Elon Musk currently has a net worth of $269.7 Billion. Simple arithmetics would imply that he spent 1/6th of his current net worth to buy Twitter. While he is a 21% shareholder in Tesla, the single largest institutional stakeholder, he has taken a loan against half of that value. With this said, even the remnants that he does own fully amount to a whole lot today. It is primarily owing to Tesla’s focus on reinventing class electronic vehicles, and the high tide of electronic vehicles as a substitute for fuel-powered vehicles the world is currently witnessing. The coinciding of both these elements almost guarantees Tesla’s growth. Tesla is now placed at a higher monetary worth than GM, Volkswagen, Ford and Toyota.
His other endeavours are also promising in their own respective fields. Musk’s organisation SpaceX is currently valued at $74bn. It has recently received significant funds in February 2021 and announced a commercial contract with NASA. The success of this project may bring humongous economical success and open many new avenues for SpaceX. He also owns Neuralink and The Boring Company, both of which are doing seemingly well. He used to own PayPal until some time ago too.
All these combined, the increment in Tesla stocks and the increased private investor transactions in SpaceX allow Elon Musk to take over Twitter with $44 Billion. As the deal is now finalised, the documents of US Security Regulators reveal he would pay $21 Billion by himself, while the remainder would be loaned by Morgan Stanley and other banks. It is said that of the $21 Billion he is to give by himself, some part would be from his monetised stake in Tesla.
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