Musk Pledges Additional $6.25B for Twitter Purchase

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The Facts

  • Tesla and SpaceX CEO Elon Musk revealed in a regulatory filing on Wed. that he has pledged an additional $6.25B in equity financing to his $44B bid to take over Twitter, reducing his margin loan against his Tesla shares to zero and increasing his cash contribution to $33.5B.

  • In light of this news, and Musk's stated intent to pursue other outside financial assistance, Twitter shares jumped around 6% on Wednesday. Shares had slumped since some uncertainty about the deal surfaced.


The Spin

Narrative A

Although the rise in Twitter stock price is positive news, the fact that the increase was only slight is a sign that public markets are still being cautious. General economic headwinds and dramatic turmoil at Twitter – including its board shakeup and its recent $150M settlement over a user-privacy issue – are combining with Musk's unpredictability to keep doubts alive.

Narrative B

Musk is a smart guy; his actions may at times seem unpredictable, but they're usually very calculated. The bot issue is likely just a scapegoat to push for a lower price. Despite the Twitter board's vows to hold Musk to the $44B price, a lot has changed in the past month to lower the price of tech stocks. Musk isn't going to be fooled into overpaying in this deal.


Metaculus Prediction


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