How will Elon Musk pay for Twitter?

Elon Musk bought himself some time Thursday after a judge granted the billionaire's request to stay a Twitter lawsuit to allow him to complete his planned $44 billion acquisition of the social media company by Oct. 28.

Now the big question is: How will he pay for it?

Musk said earlier this week that he would buy Twitter for $54.20 per share, the price agreed to in April, but he made it a condition of the deal that it be completed contingent on debt financing for the transaction.


Musk has pledged to provide $46.5 billion in equity and debt financing for the acquisition, which covers the $44 billion price tag and closing costs. Banks, including Morgan Stanley and Bank of America Corp, have committed to providing $13 billion in debt to support the deal.

Twitter on Thursday quoted one of the banks as saying Musk had not told them he intended to close the transaction. Musk said the banks are "working cooperatively to fund the closing" on or around Oct. 28.

Musk's $33.5 billion equity commitment would include his 9.6 percent Twitter stake, valued at $4 billion, and the $7.1 billion he has received from investors including Oracle co-founder Larry Ellison and Saudi Prince Alwaleed bin Talal.

So Musk still needs to raise another $22.4 billion to cover the equity portion of the deal.


The 51-year-old Musk is the richest person in the world, according to Forbes, with a net worth of $219 billion, but much of his wealth is tied to his stakes in Tesla and Space X.

According to a Reuters calculation, Musk has about $20 billion in cash after selling part of his Tesla stake through several transactions in November and December last year and April and August this year. That means he would need to raise an additional $2 billion to $3 billion, even if the other equity and debt covenants are met.


He can either sell a larger portion of his stake in Tesla or his stake in SpaceX. Other options include taking out a bank loan against the shares or bringing in more investors.

In August, Musk said he had no plans to sell his stake in Tesla further, but Musk's recent about-face has revived concerns about whether he will sell more shares in the electric car maker to fund the deal.

After the 3-for-1 stock split, Musk owned 465 million Tesla shares worth $111 billion, Reuters calculated. He has already financed much of his Tesla stake with loans.


On April 20, Oracle founder Larry Ellison said he was interested in joining the deal as one of Twitter's investors.

Ellison is among a group of investors who have collectively pledged to provide $7.1 billion in funding for the deal. So far, no investor has publicly stated that they would back away from their commitments. 

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