LBO
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Depends on if your are talking to professionals or Reddit screechers. PE stands for all private investment, it covers literally all categories outside of public markets. There are subcategories within it. What Reddit pretends it is are LBO firms, with a few special inclusions for any PE outcome they find disfavorable such as rollup funds and just in general stuff like operating dollar store chains or the like. If you are a small business owner in the trades and your retirement plan is selling your plumbing businesses to someone to cash out - you will be talking to PE to do it.
A CDO is a pool of debt sliced into tranced. A CLO is a different kind of CDO (consisting of company loans (mostly from LBO's)). A MBS is an unslided debt type. it is purely pass through without slicing. If you slice a MBS, you get a CMO. If you slice a loan pool, you get a CLO. Both a CLO and a CMO are CDO's. Both a MBS and CLO's are ABS (asset back securities). ABS can also be made from car loans, consumer debt. So a cds is a cds, but if you write cdo's you get "interest income / annual fee's". If you combine this with risk free debt (eg gov debt), you can replicate a CDO. (eg interest gov bond + CDS premium > CDO interest. If the CDO defaults you pay out the CDS with the gov bonds, and the owner of the synthetic CDO losses his money just like when he/she owned the real thing). So you get a CDO/CLO without buying the real assets, but the return profile is the same (hence the synthetic). A TRS is just a fixes/floating interest rate swap. eg my contract says I have to pay floating, but I want fixed, I do a TRS.
The quiet story here isn’t NVIDIA’s earnings. **It’s private credit being sold as a safe asset class.** Wall Street has found a new way to rebrand leverage. **The same desks that once syndicated LBO debt, dot-com convertibles, and mortgage tranches are now structuring loans to finance AI infrastructure** — GPU farms, data centers, and private clouds. On paper, it all looks safe: long-dated contracts, real hardware, predictable revenue. That’s the sales pitch every credit cycle starts with. Look at **xAI. Musk’s venture is reportedly raising close to $20 billion**, much of it debt, to build its compute footprint. That’s not R&D spending; that’s a **leveraged infrastructure bet underwritten by the same private-credit funds that financed CoreWeave’s $7½ billion GPU-backed facility**. When lenders start treating experimental AI capacity as “core infrastructure,” you’re no longer talking about technology — you’re talking about structured finance. In the 1980s, junk bonds were the “safe” yield. In 2000, it was internet-traffic infrastructure debt, billions poured into fiber-optic networks and Cisco routers on the belief that bandwidth demand would double forever. In 2007, it was mortgage paper stamped AAA. Today, it’s the AI mania, fueled by private credit and packaged as yield so safe it supposedly pays for itself. **Each time, the promise is the same: high returns, low risk.** **This time, the collateral is in GPUs instead of houses, but the narrative is the same.**
You need bankers. Investment bankers with experience on LBO's (leveraged buyouts). If the numbers work you will be able to find a reputable company to work with on this.
IB comes up with new ways to make money, like LBO, SPAC, subprime mortgage, CDS, etc It's sort of an investment, but not something we peasants do when we're saying "investment"
# it only cost the USA $40B to openly rig the Argentinian election… it’s time to announce the LBO led by Scotty B
Yeah you have no idea how an LBO works but go off
This is called an LBO model. Also, 98% of the work of doing a model is getting steps 1-3 right so I’m not sure this method saves you as much time as you think.
Long story short, BDCs own private credit, and that's an area of major risk. Recently, an LBO target went bankrupt and that's where the worry is from sicne this is junior debt with a high risk of default.
Word on the street is PE will LBO it next week. It's going to be huge
In 2005 Toys R Us had less than [2 billion](https://www.theatlantic.com/magazine/archive/2018/07/toys-r-us-bankruptcy-private-equity/561758/) in debt before the LBO then added 5 billion immediately after. Gymboree had less than [140 million](https://www.thestreet.com/markets/gymboree-weighed-down-by-11b-debt-burden-12242155) in debt, then their LBO added 1.1 billion. These deals add more debt & fees making it impossible for them to pay back ultimately making them be sold off for parts. LBOs are
Merger arbitrage in a nut shell. The ~$8 spread “profit” is priced this way because of various factors. There is the risk that the deal falls through. Remember this deal will need to be approved by shareholders, regulators, antitrust etc. This will all take time, so that is also reflected in the spread. The deal is expected to close in Q1 of Fiscal Year 2027. Essentially it’s a rate of return play. You can make ~$8 plus the dividends paid to close on a $202 investment if the deal closes. It’s like 3% ROR on an annualized basis at current levels to that close date even with collecting the dividends along the way. It’s up to you to decide if that is worth the risk. The biggest risk in my opinion is the financing. This is the largest LBO in history. There are a lot of parties in the buyers group. It only takes one to fall down on the financing. I would want to paid for all of that risk and at the current spread, it’s not enough.
"Increased Bankruptcy Risk: LBOs increase the probability of bankruptcy for target companies by about 18-20%, with healthy companies becoming 10 times more likely to default within a decade. " LBO's are a deathknell, if you see private equity using an LBO, most of the time they just want to enrich themselves. Load it up with debt and slash and burn.
big potential LBO of EA for lots of $ - means folks are willing to buy video game companies at high multiples = higher stock prices
Leverage most definitely affect IRR of the firm. They can make significantly higher returns with the money they have when they buy a business for less. I was not aware of the PE stocks because that changes things. You need millions if you become a client of the PE firm. But still, PE stocks are able to generate that return one because of the private sector but significantly because of leverage. Name one PE firm that does not do LBO's.
No growth, nothing special dividend, and family shares with super voting. The Robert's family are probably trying to drive it down to take it private for a big LBO cash out.
Also long $ZIM. Not for the normal reasons though. I solely think they’re working towards a LBO or merger. There books just look to cash strong since there 2026-2027 lease obligations are what’s throwing off their LTD on their balance sheet.
That’s VC - a type of private equity but not the kind of asset class we refer to as private equity (PE), which involves levering up on debt to buy businesses (LBO) with predictable cash flows, do roll-up strategies, etc.
Besides the obvious ones like Wall Street, Margin Call, and Boiler Room check out **Barbarians at the Gate (1993)**. It is about the RJR Nabisco LBO.
Just miscalculated EBITDA on and LBO and blamed the summer intern🫵🤣🤪
Can I start my own PE fund and invest my 401k proceeds into buying a business? Layer in an SBA 7a loan and call it a mini LBO.
He didn't borrow against Tesla shares to buy twitter. You can look up the structure of the deal. He sold Tesla shares to purchase his portion, other investors provided cash and the debt used is owed by Twitter itself in an LBO deal structure. He does borrow against Tesla shares for his personal spending, but the board has that capped at a very small amount of shares that can be pledged.
Except every LBO needs a Sponsor, you can't buy your equity with your own debt, so to speak. I mean, look at this shitshow: [https://www.bloomberg.com/news/articles/2025-05-22/rare-private-credit-auction-seeks-bidders-in-market-trading-test?srnd=phx-deals](https://www.bloomberg.com/news/articles/2025-05-22/rare-private-credit-auction-seeks-bidders-in-market-trading-test?srnd=phx-deals) US CDS are now about 30bps below GREECE. FUCKING GREECE!!!!!
Don’t get this. As of December, they had $4B in cash on hand and their burn rate gives them years of runway. Revenue is up 36% yoy. Bankruptcy isn’t in the cards unless something wild happens. Worst case seems to be a LBO at a reduced price.
Not with that attitude! They totally could with an LBO, actually, but you're right in terms of just cash.
Highly unlikely, it’s not a very attractive LBO target for many reasons right now
“The Big Short” is a notable one. I tend to think that there are a lot more international nuances to what happened during that time than just what’s shown and commonly talked about, but the characters are or are based on real funds and traders and does give a good description of the mortgage backed security market. “Margin Call” shows more on the banking side of the ‘08 crisis through the lens of a fictional investment bank (that has no similarities to Goldman’s trading arm) discovering that they haven’t adequately accounted for duration and default risks dumping MBSs on the market to avoid their portfolio collapsing. It might seem like more of a crazy comedic one but “Wolf of Wall Street.” It actually does a really good job showing the types of fraud and market manipulation that got heavy around the 80s to early 2000. I did the SIE as well and knowing about those regulations and why we have them is substantial. It really becomes quite evident in the movie. “Barbarians at the Gate” is perhaps the lest closely tied to the SIE but gets into the early days of LBO funds covering the KKR buyout of RJR-Nabisco which was an absolutely wild bit of dealmaking and financial combat (for lack of a better term.) It’s a wild story that set off a new era in finance and lead to the private equity dominant environment of today.
He sold Tesla shares to fund his purchase. He has no personal debt liability for the Twitter purchase. It was an LBO, Twitter is the entity in debt.
Has there been a successful PE LBO that re-listed? The ones I can think of, like DBD eventually end up filing for Chapter 11 and screw the shareholders.
PE timelines in general are getting stretched. Exits are taking longer. Overall market for LBO and flipping doesn’t seem great right now. If you think recovery in all this is going to happen, then hop on the APO train. It’s basically a bet on if the continued rent-seeking in the economy will be tolerated and if so, to what extent. If equities continue to decrease in the aggregate, it could present excellent opportunities for Apollo.
I think the reason why multiple retailers rejected their high buyout proposals was because of the sale-leaseback provisions in the deals. Meaning the retailers would have to sell and lease back all their real estate and lease it back to create cash for the acquirer, adding a large lease liability in the process. Similar to an LBO, this could potentially destroy the company by creating a lease obligation it won’t be able to fulfill (basically debt). Basically, a big one-time dividend to saddle the acquired company with a massive long-term liability.
So RDDT needs to LBO GOOG? /s Good analysis. Thanks. I do think your point about the political content becoming suffocating, even for those that share the anti-Trump/Musk sentiment, is a valid concern. Would be nice with a non-binary filter, like "Only show me 10 (or pick your number) posts a day mentioning Trump/Musk." There also seems to be a visible shift in Google results. There were a few weeks where Reddit results were at the top of Google every time, but that went away again and hasn't returned. My theory is that Google was testing it out and that boosted Reddit a ton, but then Google stopped it again for whatever reason. So the boost Reddit has experienced might be short-lived because it was just the result of a short-lived Google experiment.
Well I have a stock that is up 4.5x in 18 months. I think it was probably 50% undervalued when I bought it. Now it trades at \~30x FCF yield and has a 3% organic growth annual CAGR. It's a public LBO with a good runway but that isn't for sure. So I think I pulled forward 5 years of earnings.
He’s connected to large Wall Street raiders/LBO kings like Ron Perelman of Revlon and Marcel Enterprises. Listen to the podcast interview. Also, there has been some unsubstantiated rumours of AYR being acquired, where Cohen is now temporary CEO.
This is basically in the same position as TGT now. Distressed stock carrying large brand value but labeled as “woke” by right wing consumers. These two are ripe for a LBO in 2025.
Watch TGT. Ideal LBO opportunity.
Couple of questions, OP: (1) What do the NTM EBITDA projections look like for the company (on a $3mm valuation)? (2) Are you guys paying out distributions to equity? (3) What sort of interest burden on the debt? Any prepayment penalties / call premiums attached (would think not, but figured now was the time to ask)? What you're (effectively) proposing, by financing the purchase, is a mini-LBO, since you'd be levering up to buy your equity stake. That doesn't necessarily mean that is a dumb idea (PE industry rakes in billions using that exact same playbook: juicing returns to equity by levering up as much as possible), but it would depend on (a) what your paying for in terms of valuation (which is why the NTM EBITDA value is sort of important, vis-a-vis relative valuation) and (b) can you knock down principle quickly (which is why I posed the dividend question since you can use that excess cash to hammer down debt)
A common way PE firms use debt is to load up the balance sheet with debt at the time of takeover (see LBO for more details). Then they do all the stuff you said to generate free cashflow to pay off that debt Since enterprise value is debt minus equity, if you reduce the proportion of debt but keep the same valuation, the equity portion rises in value. The equity appreciation is how they make money The problem is when PE firms get it wrong and add too much debt - straw breaking the camel's back. A big miscalculation that backfires on everyone But my point is - PE firms don't want to leave a company drowned in debt - it destroys their equity value. And issuing debt to pay dividends is a zero sum tactic, because it reduces the company's resale value, which is how PE firms usually exit
Lots of LBO'S and bond issuance still, no sign in credit of stress... yet. Search for yield leads to risky investments though and all it takes is a small ripple to create a big problem for the credit industry.
TSLA is systemic after the Twitter scam LBO
If CLF doesn't offer better terms for an X buyout than Nippon then shareholders are going to reject their offer. They would have to do a massive leveraged buyout, which almost always fails, especially as the US looks to be entering in a recession. The unions are also idiots. Without a Nippon buyout their mills will shut down because X doesn't have the capital to improve them like the now \~$3B that Nippon is saying they'll do. Nippon says no layoffs until at least 2026, you can assume any LBO by CLF or another company it will be immediate layoffs.
They should be low, government just needs to learn how spend less and be less wasteful. Same formula as M&A or LBO in finance - you cut out the corporate middlemen and improve operational performance
He's also a big source of revenue hence why they agreed to underwrite this retarded LBO on such aggressive terms.
I really wish Rolls Royce just LBO Boeing. The world would feel safer.
>[Thanks chiefly to the legacy Twitter LBO debt, Barclays senior M&A team were informed last year their annual compensation would shrink by 40% over the previous year. The cut was so severe that almost a quarter of the bank’s 200-plus managing directors quit once they had collected it.](https://fortune.com/2024/08/20/elon-musk-tesla-twitter-leveraged-buyout-debt-banks-barclays/) fucking lol
Apex capital trust cannot be a real company. 0 employees, their domain is for sale, this would be the single largest LBO in history from a hedge fund with no website https://preview.redd.it/oof9ci0d1wfd1.png?width=1244&format=png&auto=webp&s=8eb5e518b41969689fdda60be93a283bc60c77fd
Buy a growing company for $2B, congratulations you just turned into a growing company. $GME could do a LBO of a significantly better company now if they wanted, my guess is they’ll take an activist role in another company and push for change.
More of an LBO guy myself but yes, many many times lol. It’s just a template at this point
There is a lot of gas in the tank. Autonomous driving will take this up another notch along with some acquisitions. That's the real question, who will they be allowed to buy? LBO of Micron, IBM for supercomputing, etc? Any ideas?
Yahoo, Dunkin, Dominos, Merlin, Alliance boots, RBI, Chobani. There are plenty of examples of companies that have done very well post PE, but for every success story, there's 3 that have done no better or worse, and 2 horror stories of companies that got gutted by the debt from an LBO and the lack of clear vision. It all depends on who the PE firms bring in, and whether the business actually has a shot at paying off the debt.
From what I remember of the Apollo investment thesis, part of it was asset sales (I think this all occurred within a year of the LBO) and rest was that the decline of Yahoo ad business will be much slower than people think and it will have many years of strong free cash flow left before that happens
low key, I kinda like long-dated PTON calls, feel like they're cheap enough and popular enough that someone would scoop them up in an M&A/LBO
Did you not see the income from operations line? On flat revenue, they were losing $1 billion a year. They had a lot of debt, more debt than cash. LBO had even more debt. Layoffs were coming regardless.
There is a huge difference between what happened because he took them over and what he did once he took over. A massive amount of the situation was cast when he was forced to honor his foolish commitment to buy them. That’s not on his ability to manage the business, that’s mostly political and situational. And Twitter management could have chosen to not force him to buy the company if they thought they could raise valuation beyond what Musk offered. Clearly they didn’t think that as the stock likely would have at least dropped in half, if not 75% like many others in that time period. If Musk had made the offer a mere 2 months later than he did, he likely wouldn’t have needed a LBO… the stock would have plummeted much more already. And the necessity of the level of drastic action would have been mitigated somewhat. Not to mention the financial damage the company went through before Musk walked in the door… those losses were increasing as management basically took a holiday.
Yeah. Adding back interest is valid in a variety of settings (quite literally with an LBO but also others). Net income is profitability specifically for shareholders, not all providers of capital. This kernel of truth is a reason EBITDA (and many things with humans) caught on.
EBITDA is a private equity metric, used to evaluate a company without taking into account its current cap structure because that will all change in a LBO.
Easy way to remember what each section of the SCF reconciles below Cash Flow From Operations - Adjustments to reconcile (a) the income statement and (b) working capital accounts (current assets and current liabilities) Cash Flow from Investment - Non-cash adjustments made to Long Term Assets (PP&E / capex being the big ticket item in this section) ***Cash Flow from Financing*** - Non-cash adjustments to Liabilities and Equity not reflected in net income Negative CFF isn't necessarily a good or bad thing - like most things related to accounting and finance, the answer is "it depends" E.g. negative cash flow from financing could indicate that you're paying back more debt than your withdrawing. This is something that we can probably categorize as "good" Or maybe it means your generating 100% of your periodic cashflow organically through earnings, but you're also paying dividends to common equity. We can probably bucket this in the "good" category. Maybe your doing a dividend recap and your taking out debt and using those funds + cash on the balance sheet to pay common equity (rare, but normally seen from PE sponsors). Alternatively, maybe you're doing this to avoid issuing a dividend out of retained earnings, in the event you need to distribute cash to equity but can't let retained earnings go negative (can violate debt covenants from private lenders or maybe it triggers preferred equity conversion to common at a super dilutive multiplier) Maybe your doing a LBO or MBO, and you're issuing debt to buyout public common equity holders + using the excess cash as incremental liquidity since you won't have access to public markets. TL;DR - there's rarely some binary "good / bad" judgement when it comes to reading financial statements. Finance / accounting isn't black and white like that, otherwise it'd be a lot less confusing. Context matters. Future cash flow prospects matter. Risk tolerance matters. Industry matters. Capital structure matters. All of it needs to be considered. If you're looking for a cheat code by merely looking at whether or not CFF is positive / negative and making asset allocation decisions based on that factor alone.......you're going probably lose a lot of money very quickly....
It’s not because it’s Chinese, it’s because it’s a private equity firm. This is the classic private equity playbook: buy a good company with LBO, make it take out massive debt, fire people, change what made it good, then slowly destroy it.
WBD but highly questionable company at a great risk adjusted price merger was structured like an LBO which has compressed and could continue to compress the equity. secularly declining primary business. but, co has been consolidated like a PE deal and cash flowing. Equity is currently 3x fcf. if they stabilize/slow linear decline, normalize studios, and grow gaming and dtc going forward then the mechanics will play out like a LBO. Equity will explode. Consider they've reduced leverage by 20% in 18 months yet the equity value is at post-merger lows (meaning the EV is way lower). If EV just returns to the last share price low in 2022 (same share price as now), that is a 30% increase to equity. If they show stabilization and sone mild offsetting growth, and EV reprices to something like 10x EBITDA with some continued deleveraging, then share price quadruples without a meaningful change in financials. Interesting, but high risk because equity is such a small part of overall EV. That's leverage.
MBA / LBO / PE mindset is to just extract value in the short term - normally the companies they do this stuff do go under or aren't so big, get loaded up wtih debt , spun off etc etc. Here they took a long running business and brand and just tried to increase the margin through shitty cost cutting practices
Retail peak earnings risk vs non-trough create bear case: * There of course is the risk of buying a stock that could be at peak earnings creating at non-trough valuation. While we think the pro-forma-ing of the cap table for near-term FCF combined with structural cost savings adequately protects downside as illustrated in our downside case, we also note that there is an added layer of protection: if this narrative gains traction, most US apparel retailers are mispriced. * In the table below, you’ll see creates on FY21 vs avg 1yr fwd EV/EBITDA multiples from ’15-’19 (ie pre-covid baseline). Peers like AEO & GPS are trading at substantial premiums to baseline valuation (35+%) vs ANF in our base case trading at a 40% discount. * If the ‘peak earnings’ narrative were to play out, we believe ANF will outperform its peer group significantly, and suggest that investors who are concerned about this risk consider hedging it out with any one of the many alternatives. Risks: * Demand fades sooner and/or more aggressively than we expect * This could certainly happen, but it’s unlikely at least through Q3 given the trends we are seeing in our data ensemble and any such slowdown still won’t un-do the benefits of structural cost reductions and significant cash flow generated this year. * Return of lockdowns * So far it seems that existing vaccines are effective against the delta variant, which should prevent the markets which are important to ANF (North America / Europe) from going back into lockdown I do not hold a position with the issuer such as employment, directorship, or consultancy. I and/or others I advise hold a material investment in the issuer's securities. # Catalyst * 2Q/2H results illustrate the FCF generation, at which point the St will be obligated to reflect in its EV calculation * Returning capital to shareholders. ANF currently has a cash balance of $900mm (vs historical cash balance of \~$600mm when it had a higher fixed cost structure) and has net cash of $565mm ($9/sh). Pro forma for $600mm of cash they’ll generate during the remainder of the year, the Company will have $1.5bn of cash / $1.1bn of net cash ($19/sh) which we believe will be in part returned to shareholders in the form of dividends and/or buybacks. * We believe PE could be attracted to this given the high cash balance, lack of leverage on the business, and exorbitant FCF generation during the remainder of the year. Our LBO model suggests a sponsor could write a \~$1bn equity check after paying a 33% premium, recoup \~60% of their investment by the end of the year, and generate a >50% IRR over a 2-3 year period. * Retail peak earnings risk vs non-trough create bear case: * There of course is the risk of buying a stock that could be at peak earnings creating at non-trough valuation. While we think the pro-forma-ing of the cap table for near-term FCF combined with structural cost savings adequately protects downside as illustrated in our downside case, we also note that there is an added layer of protection: if this narrative gains traction, most US apparel retailers are mispriced. * In the table below, you’ll see creates on FY21 vs avg 1yr fwd EV/EBITDA multiples from ’15-’19 (ie pre-covid baseline). Peers like AEO & GPS are trading at substantial premiums to baseline valuation (35+%) vs ANF in our base case trading at a 40% discount. * If the ‘peak earnings’ narrative were to play out, we believe ANF will outperform its peer group significantly, and suggest that investors who are concerned about this risk consider hedging it out with any one of the many alternatives.
What stops TSLA from LBO's of LUCID, Fisker, & Rivian?
waiting for more info on that private equity LBO buyout for docusign thats been in the works the past 2 months
Eh a yolo more the. Anything. Average premium of LBO is about 30%. So not terribly OTM if one happens. On top of that 2 weeks ago it was speculated it would wrap up “in the next few weeks”. So I went about 5 out.
The rumor was leaked around december 15th, then the two interested parties around Jan 15th, then a week later it was leaked that theyre looking for about 8 billion in loans to help finance the LBO. That means it could be about 16-20b. Rumors are saying docusign is asking for around 100 per share, or 20b, so itll be interesting to see where we land!. But three articles all from respected journals. I dont think its an IF, but rather a WHEN. I have 70 and 75 calls for 02.16 i bought a few weeks ago.
You have a timeline in mind for the announcement of the deal? Just yesterday, there was a report of an $8Bil LBO from PE (Bain and Hellman) for $Docu.
Those LBO loans aren’t going to pay for themselves with Twitters ad revenue
I mean that's just dumb day traders and influencers who couldn't tell you what goes into a 3 statement model. Real IBs, wealth managers and fund managers analyse company fundamentals and value a company through a DCF, LBO or through extensive comparables research.
I love his book and it was life changing for me. He has a point however. Essentially he wins if commercial real estate goes up. Banks are left holding the bag if sh*t hits the fan. Essentially he is making the banks pay for their dumb decision to lend to him. Private Equity does this all the time is Leveraged Buyouts (LBO). Am sure his assets are locked away in trusts / special purpose vehicles (SPV) to prevent banks from piercing that veil and going after his personal assets. Obviously the whole thing is disgusting but doesn’t mean it’s illegal
Earnings before taxes, interest, depreciation and amortization is meant to improve comparability between companies with different capital structures. D&A are commonly the largest non cash items for most companies, it makes sense to add it back. LBO’d companies typically have enough NOLs that they pay no taxes, but have lots of interest expense. On the flip side, if that company were to IPO, the change of control on that debt would trigger and they would have to pay down all the debt, which would then mean no interest, and still no tax until the NOLs are used up. It makes sense for private equity sponsors when they are evaluating different financial engineering to use a common “starting point” for earnings. Now, they have since taken that concept and gone to absurd lengths with additional add backs/adjustments to EBITDA that are total bullshit. The most outrageous was probably WeWork’s “community adjusted EBITDA” if you want a good example.
yo mods stop removing my comment? I knew someone would post that article, your source is outdated, here's a updated article coming from the same *author* LOL >So basically he replaced half the margin loan with money from other equity investors. He still had to pitch in about $20 billion of his own money, that is, proceeds from selling Tesla stock. Yesterday he announced another change in the financing: >Still that $13 billion of good LBO debt. >**Never mind the margin loan; it is gone now.** >$33.5 billion of equity. The entire margin loan has been replaced by an equity commitment. >**Basically the point here is that Musk has more than enough Tesla stock to sell to pay for Twitter, but only barely enough to borrow against to pay for Twitter. So he has abandoned his initial plans to borrow against his Tesla stock, presumably — who knows? — to give him more flexibility to sell it.** https://archive.is/e95rj From May 26, your article is outdated by one whole month
LMAOO I knew someone would post that article, hey midwit, your source is outdated, here's a updated article coming from the same *author* >So basically he replaced half the margin loan with money from other equity investors. He still had to pitch in about $20 billion of his own money, that is, proceeds from selling Tesla stock. Yesterday he announced another change in the financing: >Still that $13 billion of good LBO debt. >**Never mind the margin loan; it is gone now.** >$33.5 billion of equity. The entire margin loan has been replaced by an equity commitment. >**Basically the point here is that Musk has more than enough Tesla stock to sell to pay for Twitter, but only barely enough to borrow against to pay for Twitter. So he has abandoned his initial plans to borrow against his Tesla stock, presumably — who knows? — to give him more flexibility to sell it.** https://archive.is/e95rj >Oh the irony… yeah about that? 🤡
That may be in part because, IIRC, he was (maybe still is) looking at different ways to retake control of the company, including via LBO.