Elon Musk Puts More Meat On The Bones In His Bid For Twitter

The Dow Jones Industrial Average was down 981 points today, but one of the few stocks in the green was Twitter, up 3.9% (+$1.85 to close at $48.93 with an intra-day high of $49.73) after Elon Musk filed an amended Schedule 13D with the S.E.C 4/20 detailing his plan to purchase all of Twitter.

The filing removed the requirement that Twitter allow Elon Musk to conduct due diligence as well as the financing contingency due to $46.5 billion in funding which has been secured as follows:

· An April 20 Debt Commitment Letter from Morgan Stanley Senior Funding, Inc., Bank of America

BAC
, BOFA Securities, Barclays, MUFG, BNP Paribas, BNP Paribas Securities Corp., Mizuho Bank Ltd, and Societe Generale for $13 billion (comprised of a senior secured term loan facility of $6.5 billion, a senior secured revolving facility of $500 million, a senior secured bridge loan facility of up to $3 billion and a senior unsecured bridge loan facility up to $3 billion.

· An April 20 Margin Loan Commitment Letter from Morgan Stanley Senior Funding, Inc., Bank of America, Barclays Bank plc, Canadian Imperial Bank of Commerce, MUFG Bank Ltd., Credit Suisse AG, BNP Paribas, Citibank, Deutsche Bank AG, Mizuho Bank, Ltd., Royal Bank of Canada and Societe Generale, for $12.5 billion.

· An Equity Commitment Letter from Elon Musk covering the balance including fees and expenses, which is expected to be about $21 billion.

Musk is borrowing against his Tesla

TSLA
shares, but with the bank putting a maximum loan to value ratio of 20% under the Margin Loan Commitment letter and a margin call level of 35%, the shares are unlikely to be sold out from under him which is likely why shares in Tesla weren’t pummeled (they were down 3.73% versus a 2.77% decline in the S&P 500

.