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Merged Musk buys Twitter!/ Elon Musk puts Twitter deal on hold....

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lobosrul5 said:
Are you sure about that? I read somewhere that Musk had to pledge shares of Tesla against the loans. Some of the biggest banks in the world gave him loans, and they aren't managed by morons.
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I'm not sure about the whole thing, there may well be other loans involved that are collateralised on Tesla stock, but the $13 billion is now Twitter's debt and the collateral is its own assets, I believe.

Looking at this break down of the deal

https://corporatefinanceinstitute.com/resources/equities/elon-twitter-buyout/

there's a $12.5 billion loan that the article states is collateralised by Tesla stock, but there is another $13 billion in other loans. So it could be that both Twitter assets and Tesla stock are being used as collateral.

Interestingly, only 6% of Musk's Tesla stock is not pledged as collateral for various loans at the moment.
 
lobosrul5 said:
Are you sure about that? I read somewhere that Musk had to pledge shares of Tesla against the loans. Some of the biggest banks in the world gave him loans, and they aren't managed by morons.
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They may not be, but they are very greedy and the bankers responsible for brokering the deals (and pocketing the very generous fees associated with them) are rarely, if ever, the bankers responsible for managing the risk in the long term.

Remember banks continued to lend to the Trump companies for decades after it was clear to anyone what a terrible businessman, and hence risk, he was. Likewise every single company that goes out of business because it can no longer service its loans is backed by some financial institution(s) who may or may not have made a profit out of the whole cycle (including fees, interest payments and capital repayments).

If, say, $20bn were raise in loans then it wouldn't surprise me in the least if the financial institutions charged at least $2bn in fees for arranging those loans (those fees being added to the debt). That's a healthy "profit" is this year's accounts and it'll be several years (if ever) before the client defaults and by then the bankers responsible will likely be long, long gone onto another bank.
 
Darat said:
Apparently in the past the advertiser (or the booking agency) had a contact that they could talk to about these types of issues and then twitter had moderation staff to deal with it....

In the past.
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Ah, facts. :rolleyes:
 
The Don said:
They may not be, but they are very greedy and the bankers responsible for brokering the deals (and pocketing the very generous fees associated with them) are rarely, if ever, the bankers responsible for managing the risk in the long term.

Remember banks continued to lend to the Trump companies for decades after it was clear to anyone what a terrible businessman, and hence risk, he was. Likewise every single company that goes out of business because it can no longer service its loans is backed by some financial institution(s) who may or may not have made a profit out of the whole cycle (including fees, interest payments and capital repayments).

If, say, $20bn were raise in loans then it wouldn't surprise me in the least if the financial institutions charged at least $2bn in fees for arranging those loans (those fees being added to the debt). That's a healthy "profit" is this year's accounts and it'll be several years (if ever) before the client defaults and by then the bankers responsible will likely be long, long gone onto another bank.
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Thats a huge problem in corporate America right now, and has been for a long time. Executives hitting their bonuses by either making decisions that boost short term profit, but are bad in the long run, or making risky decisions... because the risk is all on the company at large not their personal worth.

But looking at the terms of the Twitter loans I don't think thats the case here. They're either backed by Tesla, or have margin call provisions. I actually think they were pretty shrewd. And it may even be advantageous to them if Elon defaults. They could get a controlling stake in Twitter and/or Tesla.
 
plague311 said:
Can you provide me an example of a company "going woke and then broke"? I'm interested in how many times this has happened vs companies doing dumb **** and then, as you said, watching their business tank because they won't wake up.
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Do you actually expect an answer?
 
IsThisTheLife said:
Haven't you been paying attention? It was Twitter's having become so bloated with thousands of woke, over-paid and/or incompetent "liberal" staffers that the threat of insolvency created the opening for Musk's buy-out.
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Evidence?
:rolleyes:
 
d4m10n said:
I'm genuinely confused here. Did Musk provide Twitter with a comically large infusion of capital or did he saddle Twitter with unpayable amounts of debt? Did he do both in rapid succession?
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Are you familiar with the concept of "shareholders"!
:rolleyes:
 
IsThisTheLife said:
Twitter's share prices began sliding in 2019 and there was little chance of reversing the trend as long it continued haemorrhaging cash in its wage bills, the result of a strategy to skew it politically by stuffing it with thousands of highly paid but barely (if at all) competent 'moderators' and "trust and safety officers" who ticked the right boxes on their applications.
Literally a case of quantity over quality being the only way to achieve the goal of turning it to a neoliberal echo chamber/propaganda machine.

I reckon this (the company's problems balancing the books) would have been foreseen, but the price was worth it - although they didn't get the queen b!tch into the Whitehouse, Orange Man was later successfully removed and the Biden puppet regime installed.

Musk probably wasn't anticipated, but one way or another, by someone or other, things had to be taken in hand and all the dead weight the company was carrying sloughed off.

It's now academic IMV - the damage has already been done (mission accomplished).
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Evidence for this claim?
 
IsThisTheLife said:
Haven't you been paying attention? It was Twitter's having become so bloated with thousands of woke, over-paid and/or incompetent "liberal" staffers that the threat of insolvency created the opening for Musk's buy-out.
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Once again, leftists have to explain free-market economics to “conservatives.”
 
d4m10n said:
You seem to be discounting the possibility of treasury stock, which just happens to be correct in this case.

Seems like a good move for the esrtwhile stockholders but a bad move for the company itself. I suppose this is what happens when we focus on fiduciary duty above all else.
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First time I've heard treasury stock being a component of company ownership.:rolleyes:
 
lobosrul5 said:
Me too... but I am curious, in a hypothetical situation, if a publicly traded company bought back 90% of their outstanding shares... would someone owning just 51% of the remaining have control of the company??
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Depends on what the company did with the shares, if they retired the stock, yes. If they bought it to hold or spin off into a holding company then not necessarily.

But then the issue is largely moot, as company buybacks should be handled so shares are bought off each shareholder in proportion to their existing ownership. The person owning 51% at the end should be the same person owning 51% or slightly more before the buyback.
 
Gulliver Foyle said:
Depends on what the company did with the shares, if they retired the stock, yes. If they bought it to hold or spin off into a holding company then not necessarily.
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Well, yeah if they retired the shares of course not.

But then the issue is largely moot, as company buybacks should be handled so shares are bought off each shareholder in proportion to their existing ownership. The person owning 51% at the end should be the same person owning 51% or slightly more before the buyback.
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I don't think thats how buybacks are done. If I hold 1000 shares of TSLA and the company buys back 1 share in 1000 I am not forced to sell anything. It just drives the price up.*

Anyways, I now realize its all moot because a company can just re-issue their treasury shares at market price anyways to prevent anyone from easily acquiring over half of the shares remaining for public ownership.

*I actually looked that up to be sure... even though I was nearly certain.
 
Gulliver Foyle said:
But then the issue is largely moot, as company buybacks should be handled so shares are bought off each shareholder in proportion to their existing ownership.
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That's... not a buyback. That's a dividend payment with extra book keeping headaches.
 
Orphia Nay said:
Bari Weiss has been posting the Twitter Files Part Two.

https://twitter.com/bariweiss/status/1601007575633305600?s=46&t=kXK2oMZApPWWTmG5bIGA0Q

"Big news" is that Twitter censored some right wing accounts.

Oh, and then they didn't censor the doxxing of a conspiracy theorist.
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I think some people have noted that the policy Twitter was following of not amplifying certain accounts, was exactly the same as that which Elon Musk has announced.

https://twitter.com/JUNlPER/status/1601014527516024837?s=20&t=_VPx4LmtbEyV4tL-oD8rsQ
 
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