The billionaire won't face the pressure of a margin call. But the move does raise questions about how he'll replace the funding amid a broad market downturn.
lon Musk will drop one of the riskier components behind his $44 billion bid for Twitter, a move you can read as a smart one given the single direction markets have moved over the past few weeks: down, down, down.
If Musk had taken the margin loan, he would’ve secured it with his Tesla stock, some $31.25 billion based on the loan’s terms. With Tesla stock falling, he was in the position of needing more Tesla shares to cover the loan. Margin loans are a gamble in the best of times.
As with everything Musk-Twitter, there are complications to this turn of events. Foremost, where will he get the $6.5 billion in equity to replace the margin loan?
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