The move comes as Tesla’s stock price has fallen some 30 percent in the past month to just under $660. And it highlights Musk’s commitment to the Twitter deal, even as he continues to rail against the company. Shares of Twitter are up 10 percent on the news, but at $39 remain well below the $54.20 per share that Musk has agreed, indicating investors are still unsure of the deal.
Musk had already reduced his reliance on his Tesla stock. His original plan was to set aside $33.5 billion to buy Twitter and fund the rest, $11 billion, with debt. Of the $33.5 billion in equity, $21 billion came directly from him, with $12.5 billion through a bank loan against his Tesla stock. He later raised $7 billion from outside investors, reducing the loan to $6.25 billion. With this latest announcement, he is canceling the loan entirely.
However, the reason for the last switch is not clear. Borrowing against Tesla stock may jeopardize the deal as the automaker’s stock price has fallen. (Musk has already borrowed tens of billions for his stock.) Musk also says he’s continuing to talk with Twitter shareholders, including co-founder Jack Dorsey, about shifting their stakes to help fund his deal.
None of this has stopped Musk from throwing jabs. He took to Twitter after the FTC and Justice Department fined the company $150 million for doing less than it promised to protect users’ data from marketers. “If Twitter wasn’t truthful here, what else isn’t true?” Musk said† “This is very worrying news.”
Arms inventories soar despite ESG concerns
The rise of ESG investing, as well as mass shootings like the one this week in Uvalde, Texas, are spotlighting the role financial institutions play in keeping arms companies afloat. Shares in the likes of Smith & Wesson, Sturm Ruger and Vista Outdoor rose yesterday, as is customary after mass shootings.
ESG, which stands for environment, society and governance, has become an important factor on Wall Street. Some call it ‘awake capitalism’. Nevertheless, many money managers still own weapons stocks. BlackRock and Vanguard invest in weapons stocks for clients, usually through funds that track the market or parts thereof. Guns and ammunition sellers, such as Walmart, are even more common in broad-based mutual funds, index funds, and pension funds.
