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Elon Musk told bankers they wouldn’t lose any money on Twitter purchase
(arstechnica.com)
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this post was submitted on 15 Dec 2023
155 points (98.1% liked)
Enough Musk Spam
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He put up shares of Tesla as collateral. https://www.washingtonpost.com/technology/2022/04/22/musk-twitter-financing-tesla/
These 13 billions were not loaned to Musk but to Twitter. So Musk has no obligation to personally honor those loans. The bank bought the story sold by Musk that he could make Twitter so profitable that the company could repay these loans.
https://www.aljazeera.com/economy/2022/10/28/how-elon-musk-financed-his-twitter-takeover
They loaned Twitter the funds to buy itself? The more I see the bigger this scam seems.
A perfectly common practice: https://en.m.wikipedia.org/wiki/Leveraged_buyout
The buyer is not supposed to kill the value of the company this quickly though.
Can they seize Twitter and sell it to someone else?
It'd be in the banks' best interest to not sell the debt then, right? Unless they think they can get more for it than the shares are worth.
This is will beyond my knowledge. I imagine if they seized his shares that would have a huge negative impact on TSLA stock price, potentially making them worth less that they could have sold the debt for. I think if he doesn't pay, the banks are in for hurt no matter what.
That's a good point, it's strange they accepted shares as collateral at all then if just claiming them can cause them to tank in value.