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Elon Musk could be left with $33.5bn bill after spooking Twitter investors

Elon Musk risks having to come up with $33.5bn (£26.8m) in cash to fund his Twitter takeover after scaring financiers by saying the deal is “on hold”.

Mr Musk announced his intention to buy the social network for $44 billion in April, but the billionaire’s machinations have left supporters uncertain whether a deal will be signed.

Despite being nominally one of the richest men in the world, Mr Musk’s fortune is largely tied to his 15 percent stake in Tesla, meaning he has comparatively little cash on hand.

Tesla’s chief executive could be held liable for up to $33.5 billion in cash as financiers go cold on the Twitter deal, Reuters reported, citing sources familiar with the deals.

For Mr. Musk, generating more cash comes from either equity financing or stock sales. After Musk already owned $8.5 billion in Tesla stock, those talks have now been put on hold.

Neither Mr Musk, Twitter nor Apollo would comment on the break in talks, Reuters reported.

Mr Musk’s commitment to the Twitter buy has waxed and waned. After initial enthusiasm, combined with tweets about the social media site’s moderation practices, he accused Twitter executives of trying to cover up the number of fake accounts on the service.

Twitter public figures say that’s about 5 percent of its 330 million monthly active users, while Mr Musk claims the true number is higher.

Twitter boss Parag Agrawal defended the company’s calculations but has refused to provide his methodology to the SpaceX entrepreneur, according to Musk.

Mr Musk’s attorney told Twitter on Monday, “If Twitter is confident in its published spam estimates, Mr Musk does not understand the company’s reluctance to allow Mr Musk to independently evaluate those estimates.”

Some have speculated that Mr Musk’s derogatory public comments about the number of spam accounts are an attempt to fetch a lower price for Twitter than its current $54.20 per share offer.

A previous $12.5 billion margin loan secured against Tesla was later halved before being shelved altogether in late May, filings showed, despite the Tesla CEO’s equity commitments for $30.5 billion raised US dollars.

If Twitter’s purchase fails, the culpable party will have to pay a $1 billion termination fee, according to regulatory filings between Mr Musk and the company.

https://www.telegraph.co.uk/business/2022/06/08/elon-musk-may-need-find-335bn-cash-buy-twitter/ Elon Musk could be left with $33.5bn bill after spooking Twitter investors

Russell Falcon

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