The private equity firm that was backing Elon Musk’s Twitter buyout has now pulled out of the deal, leaving the billionaire with no immediate resources to actually purchase the company. If Twitter is successful in their lawsuit to force Musk to buy, he can’t use the loss of backers as an excuse and he would be forced to liquidate as many assets as possible, and that would likely mean Tesla stock. If he does so, he’ll lose the company in exchange for a worthless social media app, as Ring of Fire’s Farron Cousins explains.
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*This transcript was generated by a third-party transcription software company, so please excuse any typos.
So there’s been a lot of interesting developments this week with Elon Musk’s takeover bid with Twitter, because initially, even as the, uh, trial is actually supposed to start later this month, Elon Musk not wanting to go through that said, All right, fine, I agree to buy Twitter for the initial asking price of 44 billion. I’ll do it. Let’s make it happen. Here we go. And then the funny thing happened, His funders pulled out the group that was going to provide at least $1 billion for the 44 billion takeover bid, said, We’re not interested anymore. Not gonna happen. Best of luck to you and your future endeavors, which kind of puts Elon Musk in a very uncomfortable position, even with, you know, being the world’s richest man, you still gotta have the cash. And of course you don’t wanna just blow your own cash, right? That’s what these millionaires and billionaires do.
It’s like Donald Trump, right? You know, you are worth $10 billion, but you still have to borrow money from banks and whatnot because you’re cash poor. And I don’t know how cash poor Elon Musk is. We know Donald Trump is exceptionally cash poor. But Elon Musk, if this now has to go to trial, because he’s unable to immediately come up with a cash to purchase Twitter, and then if the trial goes Twitter’s way and they say, Haha, you do have to purchase us. The court can force Elon Musk to make the buy. But what they cannot do is force his backers to fund the deal, which would immediately put Elon Musk on the hook for 44 billion to buy Twitter. If that happens, if that happens in that way, what Elon Musk would be forced to do, because he would have no other options, would be to sell enough Tesla stock to come up with the full purchase price.
By doing so, he would lose controlling shares of the company and not buy a little. He would basically be a regular stockholder at that point, with no say and no control over his own company. So think about that for a moment. Elon Musk is at a very real risk of losing his company Tesla, to buy a worthless sack of Twitter, right? I mean, listen, the thing about Twitter that Elon Musk wants to do is he wants to take it private, which means you no longer get money from the stock. Okay? That’s over. You don’t get to do that anymore. So how is this thing gonna make money? Just with sponsored posts? You’re gonna start charging people for retweets. You’re gonna charge them a monthly fee to be verified. People won’t do it. Some will, some 100% will, most won’t, and you’re gonna lose a ton of money. Twitter
Will become worthless. Much like after News Corporation bought out my space, right? Everybody remembers my space. There’s a huge big thing. Sold it for hundreds of millions of dollars, I think $500 million, and then it went to hell. Everybody left and then it became worthless, and they ended up selling it for a couple million dollars after paying 500 million for it. It’s the same scenario. Elon Musk would turn Twitter into the new MySpace, cuz that’s the thing folks have to remember. Like MySpace was the thing. It was bigger than Facebook. Facebook only got big because MySpace died. And it so don’t think for a second that social media networks can’t die because they can. T
