Daniel Ives, Managing Director and Senior Equity Research Analyst of Wedbush Securities, tweeted about the latest happenings in the Elon Musk Twitter (TWTR) Saga. Notably, Twitter shareholders did not vote on Musk’s $44 billion takeover deal during the company’s annual general meeting held yesterday.
Ives disclosed that the latest 13D/A regulatory filing by Musk claimed that he “plans to front $33.5 billion in his bid to take over Twitter,” implying that the billionaire is inching his way closer towards the takeover and is frankly very serious about it, in contrast to mass speculation.
The news should ideally be a breather for Musk’s electric vehicle company, Tesla (TSLA), since Musk will no longer use his TSLA shares as margin loans or collateral to fund the Twitter acquisition.
The new financing structure has changed Ives’s previous stance on the deal’s chances to 50/50 from the previous 40/60 view.
Meanwhile, replies are pouring in asking Ives if this step means Musk will, in effect, sell more Tesla shares to fund the increased portion of the deal, which does not bode well for Tesla shareholders. Ives believes Musk will have to either raise capital, sell stock, or find an outside partner to fund the additional $6.5 billion.
TWTR stock gained 3.9% during the day and continued its upward streak during after-hours, gaining 5.6% on the news, while TSLA stock closed up 4.9% at $658.80 on May 25.
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