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Twitter stock pops after Elon Musk commits $33.5 billion for takeover bid

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Yahoo Finance Live anchors discuss the Twitter stock surge as Elon Musk renegotiates his takeover bid.

Video transcript

- And then finally, speaking of deals and potential deals, let's take a look at shares of Twitter. Because they are rising here this morning. The stock also got a boost yesterday. This was after Elon Musk beefed up his financing commitment to $33.5 billion for the company.

He also revealed he's in talks for additional funding. And key here, of course, the shares of Twitter have been dropping in recent weeks. So essentially, this is a renegotiation here.

He's going to provide an additional $6.25 billion in equity financing here. And by the way, this also reduces the amount of Tesla shares that he's putting up as collateral, I believe, as part of this new structure.

- That would be important.

- And so Tesla shares are up as well this morning. Yeah, but Elon Musk has kind of a big picture problem here as his shares are under pressure. They hit $620 per share. And I think that was only yesterday or the day before, they've been cut in half.

And the reason this matters is because Elon finances his lifestyle in a lot of his purchases, whatever he wants to do, spreads his cash around on the back of those shares. He takes out loans. But he can only, I believe, take out loans on about 25% of the value of those shares. So as they go down, he has less capital to work with.

- Yes.

- And at some point-- and somebody is doing the calculation out there. Feel free to tweet at me, I'd love to know the number. What's the magic number that puts him under a lot of pressure? Just to see what it is and to see if that is a target, because Wall Street hones in on things like that.

- Yes, although there are enough Tesla and Musk fanboys that--

- There's quite a few.

- --it might be tough to--

- They got the bots too.

- Yes, exactly.

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