Elon Musk Has Some Good News for Tesla Investors

Elon Musk Has Some Good News for Tesla Investors ...

Get Tesla Inc Reportinvestors and fans may be able to breathe a bit more easily.

Elon Musk''s request for a $44 billion social network Twitter (TWTR) on April 14 - Get Twitter, Inc. Reportthey''ve seen Tesla''s price fluctuating.

Outre concerns about Musk focusing less on the manufacturer of high-end electric vehicles, they also worry about the prospect of his financial withdrawal from Tesla.

The billionaire, who is heavily illiquid, was loaned a $12.5 billion margin loan to his Tesla shares to fund the Twitter transaction.

Tesla''s stock has been pressured by this margin loan; they''ve lost almost 29% of their value since the Twitter deal was announced. This is because investors wonder if Musk might sell more Tesla stock than the $8.5 billion he''s already sold to finance Twitter.

Tesla''s central focus is Tesla, and he is the product development manager, the sales manager, and the senior public-relations executive. Tesla''s remarkable stock market rise is backed by two things: its automobiles and the serial entrepreneur''s efforts.

If Musk would be less involved in Tesla, it''s difficult to see how investors will maintain absolute trust in the Austin business.

Musk Wants to Erase the Margin Loan

The tech tycoon is taking initiatives to reassure investors and fans.

After receiving $7.1 billion in preferred-equity commitments from a group of investors including Oracle (ORCL) - Get Oracle Corporation ReportFounder Larry Ellison, Sequoia Capital, Qatar Holding, and Saudi Prince Al Waleed bin Talal Al Saud, a current Twitter shareholder.

The billionaire and his advisers are currently in discussions to obtain other equity commitments, which together with the preferred financing would make it possible to reduce the margin loan and thus eliminate any financial danger for Musk and his lenders.

According to Bloomberg, the preferred equity may have a 20-year maturity and include a feature which allows interest to be paid in kind at a rate of 14%.

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The Twitter stock has slammed as Elon Musk declares that his $44 billion acquisition is ''On Hold,'' but still is "Committed."

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According to Bloomberg, the interest rate would be increased by 0.75 percentage point in the seventh, eight, and ninth years. It might also be grouped with a 10% interest rate and warrant.

A member of Musk''s office refused to make a comment.

Tesla shares that Musk holds to support his ability to borrow money would have to be $837 or above to cover a $12.5 billion margin loan. However, Musk has the capability to move forward with a $6.25 billion margin loan, which he believes will be able to pay taxes on the business. Tesla stock closed May 12 at $728.

The Acquisition of Twitter Is on Hold

Some fresh concerns over the Twitter deal have arisen. Musk said on May 13 that his offer was put on hold.

"Twitter''s agreement is temporarily on hold pending details proving that spam/fake accounts actually account for less than 5% of users," Musk told his followers.

According to a Reuters poll on May 229 million users, the company had 229 million people who saw regular ads. The news service added that less than 5% of its so-called monetizable daily active users were false or spam accounts.

The figures are from Twitter''s Securities and Exchange Commission Form10-Q, which was filed on May 2.

Musk might reorganize the price of the acquisition by using these numbers, according to industry sources, or instead reduce it altogether.

"Still committed to acquisition," Musk said several minutes after his first tweet, stating that the agreement was on hold.

While waiting for the billionaire''s final decision, his comments to his post were unsurprised among his detractors and his supporters.

"It''s like I was right all along," says economist Peter Schiff. "You never intended to buy #Twitter. You were bluffing the whole time. How many Twitter shares did you sell before tweeting this announcement?"

"Due diligence is always beneficial," another user said.

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