The social network has not been profitable for two years. It is not the most popular or the most profitable social network. But Elon Musk made it personal. He will buy Twitter whatever its value … Ever since he received the agreement from Twitter’s board of directors, the billionaire has been touring banks and investors to finance his $ 44 billion acquisition bid. On Thursday, May 5, he claimed he got 7.4 billion dollars from some of them, including Larry Ellison, the founder of Oracle, or Saudi businessman Al Walid Ben Talal.
Even for the richest man in the world, finding funding has not been easy. According to the document sent Thursday to the SEC, the American stock market police, Elon Musk must make up to 21 billion of his personal fortune. To complete this sum, twelve banks, including BNP Paribas and Société Générale, agreed to give him two separate loans for a total of 25.5 billion dollars. The contractor therefore has, to date, more than 46 billion dollars to end the acquisition of Twitter.
One of his loans must still be given to him by Morgan Stanley, the architect of this operation, on the condition that he sell part of his shares to Tesla. By appealing to private investors, Elon Musk thus succeeded in lowering the value of this debt and reducing the risk of this operation for his personal fortune. A success is all the more important that this debt will directly weigh on Twitter’s future. The company, in fact, will be asked to repay this $ 6.5 billion debt.
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The challenge of profitability
For a company that hasn’t been profitable recently, the pill can be hard to swallow. The billionaire’s takeover offer comes at a sensitive time for the group’s 7,000 employees, which are based in 35 offices around the world. It must be said that Twitter has gone through a period of transition since its founder, Jack Dorsey, left in November. His successor, Parag Agrawal, has assured that he will remain in office until the end of the deal, which could take between four and six months, according to New York Times.