What is Morgan Stanley smoking in Twitter LBO?

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Morgan Stanley is leading a $13 billion debt package for Elon Musk’s Twitter buyout and lending $12.5 billion against his Tesla stock. A good relationship with the world’s richest man may justify the risk, though, writes LiamWardProud

Twitter is poised to agree a sale to Elon Musk for around $43 billion in cash, Reuters reported on April 25, citing people familiar with the matter.

Musk said in a securities filing on April 21 that he has lined up $46.5 billion in financing to buy Twitter. Tesla’s chief executive, who has offered to buy the social network for $54.20 per share, already owns over 9% of the company. Morgan Stanley and other banks have committed to providing $13 billion in loans. The investment bank and other lenders have also agreed to provide $12.5 billion in margin loans to Musk, secured against his stock in the electric-car maker. Musk has committed to cover the remaining amount, including fees, which is estimated to be $21 billion.The corporate logo of financial firm Morgan Stanley is pictured on a building in San Diego, California September 24, 2013.

 

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LiamWardProud His agreement to acquire lithium from Chinese mining operations in Afghanistan may justify the risk. The Afghan people might not agree.

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