Musk goes to the bank
Musk: I can haz money?
Bank: You said that Twitter isn't going to be a way to make money. That you "don't care about the economics at all". Your exact words.
Musk: ...
Bank: ...
Musk: Give me money
Musk: I can haz money?
Bank: You said that Twitter isn't going to be a way to make money. That you "don't care about the economics at all". Your exact words.
Musk: ...
Bank: ...
Musk: Give me money
This is a insanely risky vanity project.
Within the past year, Telsa stock slide from a $1209/sh peak to $766/sh in the span of about five months.
In this case, MS has offered him a loan for 20% of the value of his stock.
A bit of an aside, but the richest person I know (as in buys multi-million dollar cars on a whim and has many many of those) says his credit score is pretty mediocre because he's never had a loan. I'd thought having gazillion dollars in the bank would give you a good credit score but guess not.
Just because you have a lot of money doesn't mean you'll make payments on a loan.
The fact that so many things require a high credit score is a forcing function for you to take on these debt instruments, and the credit score is a way for the system to optimize that it get its money.
The entire system is gamed against the consumers unwittingly or unwillingly forced to participate.
Not a bad way to buy stuff if you have the means to pay it off.
“Nah.”
“Alright, we don’t need BIGINT in the ‘balance’ column.”
Does it really?
I have a very high credit score but putting a large charge on one credit card (nowhere close to maxing it out though) dramatically drops my credit score for one month until I pay it off in full at the end of the month.
I pay my child's tuition in full for the year each August (school in California is way too expensive so it's a lot of money, but that's a different topic). I put it on the credit card to get some cash back. My credit score drops by about 150 points right away. Once I get the bill at the end of the cycle and pay it off, the credit score goes right back to where it was before. I don't get any bump though.
Here the bank can reclaim what is owed via other means.
Do you think it's easy to get someone with access to billions of dollars (of your money) to do something they'd rather not? They can tie you up in the courts for years since they're basically equal powers: an $800 billion bank doesn't get better lawyers than a guy worth $1 billion. A bank vs someone with just a million dollars means the individual is at a major disadvantage as lawyer fees can easily exceed that amount in attritional lawfare.
"If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem."
and comes from 1976 "As I see it: the autobiography of J. Paul Getty". There were no billionaires back then. When you owe a bank 20 Billion while being worth 260 you are still in the first category.
Just look at what recently happened in the nickel markets on the London Metals Exchange when a Chinese Nickel Producer had a margin call against a $2bn short position.
Tldr: the brokers liquidated their position due to the unnecessary risk of having a margin call over a weekend.
Only one way to find out though.
I would not bet against Musk.