The market is the reflection of perception. And the strongest tool to control perception in modern times is social media, as who controls the media controls the market’s emotions. Concerned about the same, Musk has decided to buy Twitter. But illiquid Musk does not have cash flow as his wealth is mostly invested in stocks or shares.
Financing the shopping
To fund his shopping Musk has decided to sell $8.5 billion worth of Tesla stocks. The illiquid Musk had pledged to finance the deal with $21 billion himself, a 12.5 billion loan on his Tesla shares as collateral & around $13 billion debt from various banks. On the line of the deal, he sold around $8.5 billion worth of Tesla’s stocks. The US Securities & Exchange Commission filings show that after selling 9.6 million Tesla shares this week, Musk still holds more than 15% of the company’s shares.
Anybody’s net worth is decided on the total assets & liabilities a person holds. Musk’s wealth is mostly invested in stocks & shares. And, he does not hold much cash & to fund his shopping he has to sell some stocks.
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The art of shopping without money
Musk is mostly invested in the future technology business. He has pledged to revolutionize transportation in the universe through Tesla & SpaceX. Large corporations & governments are investing billions in his companies due to his revolutionary futuristic ideas.
Moreover, governments are more inclined to support futuristic technologies through tax incentives & policy relaxations. Benefitting from the same, he & his companies bring more liberty in financial spending which is reflected in his frequent buyouts & investments.
Further, his company’s perception got an upgrade because of the domain in which it ploys its trade. Due to people being excessively hopeful towards pollution free futuristic technologies, Musk’s brand value has skyrocketed, which is also reflected in his net worth. But encashing shares or stocks without any reason will directly affect its market valuation. As the market is more sensitive than humans & the company’s perceptions are reflected in the price value of its stocks.
Thus, illiquid Musk is extracting money from his stocks without affecting the valuation through diverting his fund towards Twitter.
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One arrow two targets
In a way, he achieved two targets through this buyout of Twitter. First, he encashed the stocks & second, he controlled the global narrative building company. As Twitter is the most powerful social media company which controls, regulates & formulates the global narrative.
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But as stated, the market is all about perception. After he announced the buyout, Tesla shares sank about 12% wiping out more than $125 billion off the company. And, in the past 6 months, the company’s shares have dropped to about 27%. It reflects the decreasing confidence in the growth of the company. Investors believe his latest acquisition of Twitter will distract Musk from his original futuristic business.
Indifference to his investor’s interest, Musk is now betting on the perception-building company for the future. He knows the future will be to those who control the information & Twitter is the strongest tool in the world to implement the idea. In the name of absolute freedom of expression, he has ultimately made himself the absolute controller of freedom.
