© Reuters
By Geoffrey Smith
Investing.com — Elon Musk wants to drop his plan to borrow billions of dollars against his holdings in Tesla (NASDAQ:) in order to fund his acquisition of Twitter (NYSE:).
Instead, the Tesla CEO wants the company to issue $6 billion in preferred equity, newswires reported.
The viability of Musk’s $44 billion bid for the social media company had come under question due to the sharp slump in Tesla’s stock in recent days. That restricts the amount of money he can borrow while using the stock as collateral.
Musk had initially planned to borrow half of the funds needed for the acquisition, including a so-called margin loan of over $12 billion to be lead-managed by Morgan Stanley. Subsequent reports had indicated that a number of parties to the deal, including Musk, thought the amount of leverage too risky.
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