I’ll keep it simple for you regards:
It says right at the end of the TWTR financing deal in purest blackest ink that if the deal doesn’t close by Oct 20th, the banks can walk away from the deal.
For those that can read: [https://www.sec.gov/Archives/edgar/data/1418091/000110465922048128/tm2213229d1\_ex99-c.htm](https://www.sec.gov/Archives/edgar/data/1418091/000110465922048128/tm2213229d1_ex99-c.htm)
Regardless of Musk’s interest in the deal at this point, there’s a good chance banks really really don’t want to do this deal. It’s a crap deal, that’s obvious to even somebody as regarded as me.
Ultimately then, they would want to move the debt off their balance sheets as quickly as possible. Two options: they already have sold the debt. Now I know nothing about banks, but I assume this is unlikely, considering they haven’t given anybody money for anything anything yet. Option two: they are currently trying to sell the debt. If it’s two – now is a terrible time, with rising interest rates and a low appetite for junk bonds. There’s reports coming out that they’re having a hard time selling the junk bonds that would finance this deal to other regards.
So – if banks don’t want to do it/cant do it without taking huge losses, why can’t they just back out? The date for them to get out of their contractual obligations is Oct 20th. That’s passed. The date the twitter deal has to close is the 28th.
If banks walk, musk will owe 1Bn. Much smaller than the possible billions he could lose on this deal. So it’s somewhat in his best interest as well to let the banks walk without a fight, in that case, he just points the finger at them and says “aw shucks, I guess I couldn’t do it after all”. He got to sell billions in Tesla stock without crashing the price too hard, and ultimately comes out on top.
So my thinking is – If we don’t hear about things moving to close early this week I think the play is to LOAD up on 7DTE far far out of the money puts. Like I mean balls to the wall YOLO level puts. If the deal falls through you could see twitter go to $30 or below. Not financial advice regards, this play would be dumb risky.
Am I just extra regarded? Am I missing something entirely? Why is nobody talking about this? I feel like I’m taking crazy pills because this seems really obvious to me -which is probably why it’s one of the dumbest plays possible.
TLDR: Tell me why I’m regarded.
Current Positions: TWTR Bearish 4 Contract Spreads 10/28 (54C Buy, 50C Sell, 47P Buy, 45P Sell) $1k credit6/23 SPY Put Leaps
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I said this in another post last week and got down voted for it.
Idk but when you buy a house theres always a stipulation that if ur funding falls through the deals off and you lose your escrow cash. Assume this is no different and his 1 billion dollar breakup fee would still apply
Banks have already said they aren’t trying to sell it and are going to hold it for now. Read it somewhere the other day. Probably because they know they can’t sell it in the current environment.
I think all the talk on ukraine and StarLink is to get the government to kill the twitter deal for him. So he will focus on winning the war. Biden just came out and said that.
You’re correct. After a certain amount of time, the banks that were to help Elon finance the deal can walk. If that happens, the deal will collapse. The next steps after that are unclear. He may or may not be responsible for the breakup fee. Presumably more litigation between Twitter and Elon. And presumably Twitter’s share price drops a lot.
Why would they…lots of money to be made here
[deleted]
I already feel the rug starting to pull
I have held a similar iron condor for the past two weeks on the premise that Musk will not close by Oct 28 ($400 max risk, $1300 max return at $47, break even at $52.25). It’s possible that he really wants Twitter and he tried to pull out of the deal in the hopes that he could get a much better price (which appears to have failed), but I think he doesn’t want it and the attempted pull-out actually reflects his real sentiment. Changing his tune now to “Yea, I’m overpaying, but I’m excited by what Twitter could become” sounds like his way of trying to not appear too culpable when the deal falls through, and to help himself in the pending lawsuit. Also, October 28 being the date the deal MUST go through is nonsense. Oct. 28 just means a trial date gets set for the lawsuit sometime in November. If you think there aren’t legal means of delaying the courts into forcing a rich private citizen to do something they don’t want to do, then you have obviously not been paying attention to Musk’s buddy Trump for the past 40 years.
I’m 35P 12/16. I figured it would take longer than October to crush the deal. I think it will die in late November, then I wanted a lil bit of time for it to really tank to like $15. It’s truly a gamble, but I trust that no one really wants the deal and I’m sure there is someone corrupt enough to kill this deal.
Why would the banks walk? They make $ on finishing the deal AND interest Musk has to pay them over the years on the loan he took out. The banks are not buying the company they just lend $ to Musk to buy it.
>I’m sorry, I don’t understand what you’re asking.
Dunno but we will find out soon what happens lol
Depends on where they were in the paperwork. Lawyers gonna get paid and twitter will be sold.
Idk, if I were him, I’d just take the hit, if I absolutely had to. In long run, he’s prob gonna end up losing alot more than a billion on this deal.
Musk has several co-investors in the Twitter deal, but no banks are providing financing, to my knowledge. I read that the sovereign wealth funds of a couple Arab countries are involved plus some US private equity funds. If any of those pull out , then it could tank the whole deal, so you are right.
Typical range of approvals for financing expire around 180 days, so yes, there is a chance that the approval for financing can be null and void. That being said, the bank can decide to extend the terms of the approval as well for a short term period if the deal is looking likely to close.
That deal will not close. Period. Full stop. Ain’t happening.
Musk is so fucking stupid- he’d still have to buy twitter but finance it himself; and good riddance
Elon doesn’t need the banks help to sink it. He’s doing a fine job on his own. Openly engaging Russia via Twitter like he’s doing now, isn’t a good look to NATO and most of the post WWII western world. If I were a bank rn?
And regardless, I bet he’s gonna sell a shitload of Tesla next week to finance at least for now.