Elon Musk bought Twitter and immediately created a public uproar. However, there is an assumption that even though he holds the title of the richest person in the world, Musk can't actually afford Twitter.
Elon Musk traded Twitter for $44 billion. He is known to have sold $8.5 billion of Tesla shares and received funding from Morgan Stanley and other financial institutions for an additional $7 billion.
Since the announcement of the deal, Tesla's stock has plunged more than 25% as investors feared Musk could relinquish more of his holdings in the company. Twitter shares also fell in the days following Elon Musk's purchase.
Musk, who is reportedly still seeking equity from co-investors, could still try to renegotiate his original offering price or abandon Twitter's offering entirely. However, he was unable to walk out of the deal without any loss. If Twitter rejects his renegotiation attempts, Musk will have to be prepared to pay $1 billion in farewell.
Roger Kay, founder and president of Endpoint Technologies Associates, described Musk's actions as a "disruptive anarchist approach". Musk has contributed to market skepticism about the feasibility of the deal.
"You really don't know what to expect from him. I wouldn't be surprised if he suddenly reconfigured his offer and ignored it. He would just say, 'Well, it wasn't worth it,'" Kay explained in an interview with Vanity Fair.
"Typically, you hire investment banks and lawyers who are very careful with what you say. You don't really promise anything. You don't announce anything until it's really pressured. Musk doesn't do any of that. And the result is chaos." said Kay.
Last week, Musk revealed that he had secured $7.14 billion in funding for a deal with Twitter. His co-investor group now includes Oracle co-founder (and Trump supporter) Larry Ellison, an investment house run by Qatari sovereign wealth fund Sequoia Capital, Andreessen Horowitz, crypto exchange platform Binance, and 13 others.
The filing also reveals that Prince Alwaleed bin Talal will retain his 35 million stake in Twitter if Musk takes over. Since the disclosure, Musk has secured another $1 billion in equity, according to a Bloomberg News report.
While Musk has publicly said he doesn't care about the economy on Twitter, he has floated plans to expand the site's paid subscription model during talks with fellow investors. He reportedly also plans to cut roughly 1,000 staff on Twitter over the next year, before adding about 2,700 new employees by 2025.
