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[Continuation] Musk buys Twitter II

Yeah, I'm with Zaganza on this one. It's bad business practice (and possibly illegal) to mix personal finances with business finances.
 
The Great Zaganza said:
BIG difference.

Musk can let Twitter sink under a mountain of debt without going under himself.
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arthwollipot said:
Yeah, I'm with Zaganza on this one. It's bad business practice (and possibly illegal) to mix personal finances with business finances.
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I'm talking about whether he will ever recoup his investment. Sure, if Twitter goes bankrupt, that's different from Musk himself going bankrupt. But then Twitter's creditors will end up owning it.

How Elon bought Twitter with other people's money

Yes, Elon Musk is the richest person in the world. But he only used some of his cash to buy Twitter for $44 billion. For the rest of it, he used a tactic called a leveraged buyout and spent $13 billion of borrowed money on the acquisition. And now Twitter—not Elon—is on the hook for that loan.
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So he paid $31 billion of his own money, right? And borrowed another $13 billion for the rest, which is owed by Twitter, not him personally.

But if Twitter at some point in the future is unable to pay off those loans, he will either have to find a way to raise more money (from people who will naturally want something for their investment) or make the payments himself, or have the company declare bankruptcy, in which case he may no longer own the company anymore. At a minimum he's out $31 billion if Twitter never returns to profitability.
 
jeremyp said:
Of course there’s a difference. Musk owns Twitter but their finances are separate. Twitter is a limited company. If Twitter goes bankrupt, Musk is not also bankrupt.
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Like me taking out a buy-to-let mortgage and persuading the bank that the house should owe the debt not me. And, I would like to see if Musk is charging Twitter any management fees, which KKR or Black Rock do when they buy companies (via leveraged debt)
 
jimbob said:
Like me taking out a buy-to-let mortgage and persuading the bank that the house should owe the debt not me.
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A house cannot owe money, but you could create a company, ("Jimbob's Estates") and have the company borrow the money to buy the house. Then the company, not you, would be responsible for the debt. If this arrangement is acceptable to the bank, I don't see why it couldn't work in principle.
 
Gulliver Foyle said:
No he can't, most of the debt notes are held by Mohammed bin Salman ibn Saud.
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Are you implying that Musk will be assassinated by the Sauds if he defaults? Else, his debt is the same as any other.

Plus, because Twitter was such a bad purchase, Musk had to secure debt on Tesla stock.
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Nothing even remotely unusual with stock being used as loan collateral.

The worst legal consequence for Musk over the Twitter deal is he loses control of Tesla.

I guess the really worst case for Musk is he becomes short one head.
 
Gulliver Foyle said:
No he can't, most of the debt notes are held by Mohammed bin Salman ibn Saud.

Plus, because Twitter was such a bad purchase, Musk had to secure debt on Tesla stock.
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he can't because he would be invited to a Tea and Dismemberment Party?
because I don't see a legal reason why he couldn't.
 
lobosrul5 said:
Are you implying that Musk will be assassinated by the Sauds if he defaults? Else, his debt is the same as any other.



Nothing even remotely unusual with stock being used as loan collateral.

The worst legal consequence for Musk over the Twitter deal is he loses control of Tesla.

I guess the really worst case for Musk is he becomes short one head.
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Definitely not unusual to use stock for loan collateral. It's really the only way that Musk can convert his paper billions into real money, because

a) if he sells shares it impacts the price of Tesla stock making him technically poorer

b) the profits from any shares he sells are liable for tax.

In fact, it is estimated that around 90% of Musk's Tesla shares are pledged as loan collateral.
 
jeremyp said:
Definitely not unusual to use stock for loan collateral. It's really the only way that Musk can convert his paper billions into real money, because

a) if he sells shares it impacts the price of Tesla stock making him technically poorer

b) the profits from any shares he sells are liable for tax.

In fact, it is estimated that around 90% of Musk's Tesla shares are pledged as loan collateral.
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I would think, his creditors would just take over the pledged shares if he defaults, not sell them. Yes if Musk put in a market sell order for his entire holding of Tesla the price would crash... heck it might cause the NASDAQ to halt trading.
 
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lobosrul5 said:
Are you implying that Musk will be assassinated by the Sauds if he defaults? Else, his debt is the same as any other.



Nothing even remotely unusual with stock being used as loan collateral.

The worst legal consequence for Musk over the Twitter deal is he loses control of Tesla.

I guess the really worst case for Musk is he becomes short one head.
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Assassination is such an ugly word, please use conscious dismemberment.

Oh and if Musk loses his Tesla stock he's no longer wealthy because so much of his net worth is tied up in it. Like most ultra rich people Musk takes his income in stock options as a tax dodge (it's much cheaper to take out loans on stock and pay interest on same than to take pay and pay income tax and pay related insurance on same, hence why capital gains and stock options should be treated exactly like a salary income).

But tying up $44bn of his personal wealth in loans for a company he's destroying is a massive issue down the line financially.
 
lobosrul5 said:
I would think, his creditors would just take over the pledged shares if he defaults, not sell them.
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I think that would depend on whether the creditors wanted Tesla stock or not.

Yes if Musk put in a market sell order for his entire holding of Tesla the price would crash... heck it might cause the NASDAQ to halt trading.
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No he doesn't need to sell his entire holding to affect the price, and Tesla doesn't have to crash to put him in jeopardy. All the shares pledged as collateral have to maintain a certain price or they won't cover the loans. If that happens, Musk either has to repay some of the loan or pledge more stock. He hasn't really got that much more stock to pledge.
 
Two liberal ex-professors are shocked SHOCKED that there are parts of Twitter that one of them calls Nazi Twitter. He explains that when he says Nazis, he means Nazis! Apparently some of these guys like Hitler. But the worst thing is that he has found out that many of the people he likes are hanging out with these Nazis, including his defenders and some others who were on the same side as him on Covid.

His wife is similarly shocked to find out that her own intolerant friends apparently don't believe in women voting.

It's hard when these two were such big proponents of Elon Musk that they began that whole #gotyourbackElon hashtag that everyone will recemember.

Anyway, enough of my waffling, just listen to these two.
 
Andy_Ross said:
Elon tweeted



And
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I mean Twitter's brand was getting trashed, but it was still worth more than the replacement.

Also trying his "X" brand to the prominent binfire he's creating in Twitter is a very strong negative for the rest of his companies.
 
jimbob said:
I mean Twitter's brand was getting trashed, but it was still worth more than the replacement.

Also trying his "X" brand to the prominent binfire he's creating in Twitter is a very strong negative for the rest of his companies.
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Musks fortune is in no small part due the the fact that he got fired from Paypal before his terrible ideas could run that company into the ground, but now he's on a position where it's much harder for anyone to stop him from commiting business suicide.
 
You mean X, the universal UI element for quitting out of something on a computer?

That's the kind Musk intelligence, foresight, and leadership we come to expect.
 
Puppycow said:
A house cannot owe money, but you could create a company, ("Jimbob's Estates") and have the company borrow the money to buy the house. Then the company, not you, would be responsible for the debt. If this arrangement is acceptable to the bank, I don't see why it couldn't work in principle.
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So in the case of Musk buying Twitter, which entity borrowed the money and which entity consequently paid for and owns Twitter?
 
Jack by the hedge said:
So in the case of Musk buying Twitter, which entity borrowed the money and which entity consequently paid for and owns Twitter?
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https://www.reuters.com/markets/us/how-will-elon-musk-pay-twitter-2022-10-07/

Musk had to raise $46.5 billion to cover the asking price and other costs.

Banks provided £13 billion in loans

Musk's holding in Twitter came to about another $4 billion

Investments from other parties like Larry Ellison and Saudi Arabia came to around £7 billion

Musk raised the rest presumably by selling Tesla shares.

The entity that bought out Twitter was a corporation called X Holdings, created by Musk specifically for the purpose. X Holdings is a holding company that has one subsidiary, noew called X Corp and X Corp is what used to be Twitter.

The $13 billion in loans were transferred to Twitter on acquisition.
 
Twitter owner Elon Musk has said he wants to get rid of the Twitter bird logo, and replace it with an "X".

However, Mr Musk also has a history of making statements that fail to happen or are not serious.

Mr Musk, who has changed the name of the business to X Corp, said the replacement "should have been done a long time ago".

According to reports, the billionaire wants to create a "super app" called "X" which is similar to China's WeChat.
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https://www.bbc.co.uk/news/business-66284304
 
How about a compromise: replace the logo with the Dead Bod meme that graffiti artist from Hull paints all over the place, and use an X for its eye?

(Worth a Google, rest of the world folks. It's really odd.)
 
Andy_Ross said:
Twitter owner Elon Musk has said he wants to get rid of the Twitter bird logo, and replace it with an "X".



https://www.bbc.co.uk/news/business-66284304
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Why not? Musk has already devalued everything else, why not trash the brand recognition too.

Musk has succeeded in making Twitter into a second-rate knockoff of itself, though generally the Twitter clones don't cost billions of dollars to create.
 
Who would pay billions to buy one of the most recognised brand logos in the world then decide to get rid of it?
 
Andy_Ross said:
Who would pay billions to buy one of the most recognised brand logos in the world then decide to get rid of it?
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I refer you to the highlighted part of this earlier reply.
Upchurch said:
You mean X, the universal UI element for quitting out of something on a computer?

That's the kind Musk intelligence, foresight, and leadership we come to expect.
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Great move, because X doesn't already have a well-established presence on the internet, or a multi-billion dollar industry behind it.

Oh wait, I just Googled X and had to take it off Safe Search. Holy cow! Someone should show Elon what comes up when you search X!

Seriously, how many government and corporate internet servers might end up blocking Twitter X automatically due to the name?
 
Axxman300 said:
Great move, because X doesn't already have a well-established presence on the internet, or a multi-billion dollar industry behind it.

Oh wait, I just Googled X and had to take it off Safe Search. Holy cow! Someone should show Elon what comes up when you search X!

Seriously, how many government and corporate internet servers might end up blocking Twitter X automatically due to the name?
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Snort
 
Andy_Ross said:
Who would pay billions to buy one of the most recognised brand logos in the world then decide to get rid of it?
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Quite mysterious. Musk could have created a lousy Twitter clone using his x.com branding full of spam bots and weird Elon fanboys for a fraction of the fortune he paid for Twitter. He doesn't seem interested in preserving any of this company he paid way too much for.

Increasingly difficult to see any reason for him to buy Twitter and run it into the ground other than he's a not very smart reactionary with an easily bruised ego and poor impulse control.
 
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TurkeysGhost said:
Quite mysterious. Musk could have created a lousy Twitter clone using his x.com branding full of spam bots and weird Elon fanboys for a fraction of the fortune he paid for Twitter. He doesn't seem interested in preserving any of this company he paid way too much for.

Increasingly difficult to see any reason for him to buy Twitter and run it into the ground other than he's a not very smart reactionary with an easily bruised ego and poor impulse control.
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Who surrounds himself with sycophants so he thinks he's a genius in multiple fields
 
Axxman300 said:
Great move, because X doesn't already have a well-established presence on the internet, or a multi-billion dollar industry behind it.

Oh wait, I just Googled X and had to take it off Safe Search. Holy cow! Someone should show Elon what comes up when you search X!

Seriously, how many government and corporate internet servers might end up blocking Twitter X automatically due to the name?
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Interesting. I just did the same and mostly got images of the letter X in various fonts and an SFW movie poster for what looks like a fairly B movie horror film from last year. That was with Safe Search off.

I guess it's true what they say: Google gives you results based on previous searches and visited web sites :)

One thing though: there was no hint of the social media site formerly known as Twitter on page 1 of the results.
 
I mean, the only way “X” works is if you pair it with something. X-Men, X-treme, X-Sports, even Space X.

By itself, you’re either assuming it’s porn or 4 decades of convention kicks in and you will have people assuming that clicking on will make it go away.

But even if people get over that, you are still in the awkward position where some of the X’s on the screen takes you to the home page and some of the X’s close windows. From a branding perspective, it’s just a mess.
 
Just a little background ...

Musk helped found x.com which eventually became PayPal and made Musk a lot of money. The x.com domain redirects to Twitter now.
 
jadebox said:
Just a little background ...

Musk helped found x.com which eventually became PayPal and made Musk a lot of money. The x.com domain redirects to Twitter now.
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Important addition to that is that Musk was wisely removed as CEO twice on the series of buyouts that lead to Paypal's rise, and complaints about his leadership seem quite familiar to his disastrous running of Twitter (micromanaging, overconfident in his limited technical skills, hostility towards employees who actually know how things work). Getting Musk out of the way seems a necessary component to allowing his businesses to succeed.

With Musk returning to his original X.com branding, you have to wonder how much of this disastrous Twitter acquisition is driven about his insecurity of being driven out of these companies that seemed to succeed once he was removed as an impediment.
 
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X is the universal symbol for closing computer windows and programs, which is more than a fitting symbol considering what's happening to twitter as Elon is apparently driven to destroy it and lose as much money as possible in the process.
 
Linda Yaccarino tweeted

X is the future state of unlimited interactivity – centered in audio, video, messaging, payments/banking – creating a global marketplace for ideas, goods, services, and opportunities. Powered by AI, X will connect us all in ways we’re just beginning to imagine.
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She's changed her profile header to the new X logo

https://twitter.com/lindayacc/status/1683213997183574017?t=oWC6gZ4qUb0eu7bzGJGFLA&s=19

There's a whole thread of similarly gibberish posts
 
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