IIRC, Musk makes Twitter a 100% cash offer. Twitter accepts, but writes the deal such that if either side pulls out of the deal, then a $1 billion penalty will be applied.
Musk goes to the banks and secures a $20 billion-ish loan, putting TSLA as collateral.
Musk starts to sell TSLA for the other $20 billion of cash. Stock tanks as a result, only ~$8 billion sold on public filing documents.
Musk runs around looking for another $12 billion for the last week or so.
And now we have today where it looks like he is failing his side of the deal. If Musk lost the $20 billion-ish from the banks due to TSLA being too low, it makes sense for him to give up.
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All that is going on right now is Musk trying to blame Twitter for the failed deal, so that he avoids the $1 billion penalty written into the contract.
The value of ads drops during a recession, and things are looking more-and-more bearish this year.
It's completely nuts for 'one guy' to spend $40B on something, too much possibility for self delusion.
Musk should have had Private Equity lined up before the offer as part of a consortium. They would have called out his bullshit.
It's really, really telling that he did not.
Imagine Musk having to sit a table with 'mere bankers' telling him he doesn't know what he is talking about.
It's easy to be full of bluster when you're sitting on top of zillions in inflated valuation.
Had you posted under any other topic relating to Musk before today, you would have had replies here claiming "Musk is highly intelligent and helped create at least 3, multi-billion dollar companies, with 2 more in the pipeline (neuralink and boring). How dare you question his genius".
Since there aren't, I'm using this comment as a reminder against confirmation bias.
Those two thing can be true at the same time.
I follow many VC Twitter accounts and it seems to me, even the 'nice' ones are giant turds when it comes to any kind of social or communitarian understanding of the world.
But they understand startups very well.
It's common among successful people, I think, to be really great in their core competency, to have fairly astute understanding of other things and yet be completely glib at the same time, and lack the self awareness to recognize it, supported by the fact that 'nobody challenges them' on anything.
It's not sensible to make ANY assertions with the market as it is today.
TSLA has a problem with its stock. It's way overpriced for the size of the company. For Tesla, the company, to grow into its stock price, it has to make more cars than Toyota, GM, Ford, Volkswagen, and the rest of the top 12 car companies put together. Toyota alone makes 5x as many cars as Tesla.
Which means TSLA is a meme stock. And the bottom is falling out of meme stocks.
You’re right that Tesla is valued on future performance but this part is just factually wrong. They will need ultimately to make more profits than those companies combined, but the number of cars is not that important. Apple has a ~25% share of the phone market but makes most of the profit.
That climbs pretty linearly with car sales. There's only so much margin you can make with a vehicle in any market. Apple manages to have higher profit at lower sales because selling a phone for $1000 that cost $200 is possible since millions of people can afford $1000.
Selling a $100k car that cost $20k is a much bigger margin than maybe Toyota has, but there are very few people who can afford $100k cars. Eventually you need volume. Apple itself has huge volume, they are outsold by around 20-30% against Samsung, not by 5000%.
And they have vertically integrated, after automakers spent decades spinning out. Much more value capture.
And they have secured better rights to raw materials (lithium).
When Elon Musk's networth is almost entirely tied up in TSLA shares, when the price of those shares declines by 20%+, it changes plans. Banks are less likely to take Elon Musk's collateral (almost certainly TSLA shares), Musk himself loses a chunk of networth and loses an ability to raise dollars, etc. etc.