Elon Musk Buys Twitter

Tesla CEO Elon Musk has bought Twitter for $44 billion.As a result, Twitter will become a privately held company.Twitter says the transaction is expected to be completed this year, pending the approval of shareholders, regulatory approval, and other closing conditions.

Elon Musk, CEO of Tesla, has agreed to spend $44 billion to buy the 15th-biggest social media network in the world. That would be Twitter, a company that has made a profit in two of the past 10 years. To scrape together that pile of money, Musk leaned heavily on Tesla, a company that has turned a profit in two of the past 19 years.

In the first quarter of last year, most of Tesla’s profit came from selling Bitcoin and emissions credits. Nonetheless, at year end, Tesla made a record profit of $5.5 billion. And if it does that for eight more years in a row, that will generate enough money to pay for Twitter. Or, looking at it another way, $44 billion would buy 907,403 Model 3s. Last year, Tesla delivered 936,172 cars worldwide.

Of course, Mr. Musk also owns SpaceX and the Boring Company, which digs tunnels. So those are worth some money, too—about $100 billion for SpaceX and $5.7 billion for the Boring Company. And to raise the $33.5 billion that Musk is contributing personally, he’ll likely have to sell off some part of his stake in either of those. But $12.5 billion is coming from a margin loan against Musk’s Tesla’s stock, and if Tesla’s stock drops by 40 percent, he’ll have to repay that $12.5 billion. Will that factor into any decision-making at Tesla? Between Nov. 5, 2021 and March 11, 2022, Tesla stock dropped by about 35 percent.

Until yesterday, it was novel to see car company CEOs on Twitter. Going forward, it’ll be interesting to see how Musk’s free-speech ideals jibe with competitors using his own platform to promote their products. When @jimfarley98 boasts about the Ford F-150 Lightning on Twitter, how will that sit with the guy behind the Cybertruck? And how will the guy behind the Cybertruck pay enough attention to that project while running yet another company that has more than 7000 employees? Guess we’ll find out!

In other news, Tesla will introduce no new models in 2022.

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