The hottest event in the capital market recently is that Musk, the world's richest man, tesla founder, Mars exploration pioneer, and the world's most rocket-savvy businessman, spent $44 billion to buy Twitter.
This capital drama can be described as ups and downs, Musk's acquisition initially encountered stubborn resistance, but it did not take long for the other party to surrender, the next thing to do is to hand over the money, the other hand delivery, Musk took out $44 billion in cash in exchange for the equity of Twitter, and made Twitter a completely private company.
How Musk, who has $3 billion in cash, managed to secure the $44 billion acquisition
Although Musk is the world's richest man and is worth hundreds of billions of dollars, he does not have so much cash in his hands, and he is very far away from $44 billion.
Don't be surprised, the value of the rich is more reflected in the paper wealth, most of their assets are listed company equity, the height of the body value and the value of the stock market is closely related, the real money and silver in their hands is not much.
The same is true of Musk, it is reported that the big man can use only a total of $3 billion in cash, in the eyes of ordinary people 3 billion dollars is undoubtedly astronomical, but not even a fraction of the $44 billion acquisition.
So the question is, where does Musk get the remaining $40 billion or so?
Musk's funds mainly come from two parts, one is to borrow money from Investment Banks such as Morgan, and Musk pledges his Tesla equity to the bank, which can roughly borrow more than $20 billion.
The so-called equity pledge is actually to use the shares of the listed company as collateral for the loan, if the borrower fails to return the borrowing bank on time, the pledged shares can be sold and the money obtained will be repaid in priority.
The second is to sell Tesla stock in the secondary market, and Musk is ready to sell some Tesla stock to raise $21 billion. This is also the reason why Tesla's stock price recently fell by more than 12% in a single day after Musk announced the acquisition of Twitter, and the huge reduction of major shareholders is a huge negative whether in A shares or US stocks, Tesla's retail shareholders are "victims" of this acquisition, and the leeks are full of attributes.
Twitter launched the Poison Pill plan to fight against capital predators
There was an even bigger problem before Musk could get the money out of the deal, and Twitter's board didn't welcome the capital tycoon.
There are many similar events in the history of capital, the most famous in China is the "Baowan Dispute" of that year, Baoneng wanted to become the majority shareholder of Vanke, but the management led by Wang Shi was unwilling to call Baoneng boss Yao Zhenhua a barbarian, and in the end Baoneng failed to achieve his wishes.
Looking back, baoneng is now difficult to protect itself, caught in a cash flow and debt crisis, if Baoneng obtained a controlling stake in Vanke at that time, the consequences would be really unimaginable.
Therefore, many times management does have a reason to guard against the "wolves" outside, especially those who just want to benefit from listed companies.
Twitter's board initially did not welcome Musk, and responded strongly when he sneaked up on 9.2% of Twitter's stake from the secondary market to become the largest shareholder and announced the acquisition.
Twitter knows that "fighting money" can't fight Musk, so it launched the "poison pill plan", which can theoretically fight any hostile takeover, even if the acquirer has more money, it can keep it out.
What is the Poison Pill Program? Simply put, it is to dilute the proportion of shares held by the acquirer by continuously issuing new shares.
For example, Zhang San wants to acquire Company A and launches the Poison Pill Plan when the cumulative number of shares in Company A it has purchased reaches 20%, stipulating that Company A can issue new shares without restriction, and all shareholders except the acquirer can buy at a very cheap price.
As soon as you look at it, Company A's stock is so much cheaper than the market price, and Zhang San can't buy these additional new shares, and the result is that the shareholding ratio is diluted.
This trick can be recycled repeatedly, even if Zhang San later buys stocks from the secondary market at a high price to increase the shareholding ratio, as long as it reaches 20% of Company A can issue new cheap shares, Zhang San's shareholding ratio is diluted again.
After all, Zhang San's funds are limited, and buying at a high price will lead to a huge floating loss, unable to persist, and finally give up the acquisition of Company A.
Twitter's poison pill scheme isn't as exaggerated as in the example, but the principle is the same.
Twitter's board of directors approved a shareholder rights plan on April 19, specifically when someone holds 15% of Twitter's shares without board approval (apparently for Musk), the company will issue new shares and sell them to shareholders other than the acquirer at half price, diluting the share held by the acquirer, so that capital cannot gain control of more than 15% of Twitter.
After the implementation of the poison pill plan, the Twitter management looks as if it is stable, and the mother no longer has to worry about the idea of the capital boss hitting Twitter, but Musk is not an ordinary person, and people can get a Twitter with a market value of less than $40 billion?
Musk gave an offer that could not be rejected, and the Twitter board "instigated"
On April 25, Musk abruptly announced that he had reached an agreement with Twitter's board of directors to acquire it for $54.20 per share, for a total cost of $44 billion mentioned earlier.
What's going on? Twitter's board of directors compromised less than a week after announcing plans to launch the poison pill, which appears to have died in the lab.
Some say twitter has a traitor on its board and was dealt with by Musk.
There's nothing wrong with that, but it's more accurate to say that all of Twitter's directors have become traitors, and they're on Musk's side.
I can't help but sigh that the speed of this face change is faster than Sichuan opera!
The key to letting the Twitter board punch itself in the face lies in "money", Musk gave a purchase price that everyone is satisfied with, it is originally a business, who is it not a sale?
The purchase price of $54.2 per share is a full 38 percent higher than the $39.31 per share before Twitter announced on April 1 that Musk was about to buy the company.
Don't look at twitter's stock price has risen to nearly $50 per share, if the acquisition plan is terminated, the stock price will fall back where it came from, so the price of $54.2 is very sincere, touching the heart of Twitter's board.
In fact, the premise of implementing the poison pill plan is that the management feels that the acquirer is "malicious", and the so-called "malice" is not that the money is not in place, as long as the price is high enough, "malice" naturally becomes "goodwill".
Just like Zhang San has a house with a market value of 3 million yuan, Li Si wants to buy it at a price of 3.1 million yuan and comes to Zhang San every day to talk, Zhang San feels annoyed and chooses to call the police.
As a result, one day Li Si suddenly decided to bid 5 million yuan to buy, the sincere price made Zhang San immediately change his point of view, not to mention the police, Li Li pulled Li Si to the real estate trading center to transfer, afraid that the next day the other party regretted not buying.
The poison pill failed because Musk found an antidote, and the most important ingredient was money.
Capital has always been like this, as long as it is profitable, the two parties who quarreled last night can sit together this morning and take a group photo with a smile and giggle, and stage a happy ending.
I can already imagine a picture of Boss Ma, who has 86 million followers on Twitter, sitting in a mansion brushing his app and waving and guiding public opinion.
The above is purely personal opinion, welcome to pay attention, like your support is the best encouragement for originality!