Tesla is up 995% over the past 5 years.

For the same sort of consideration for which one would buy a newspaper in the third millennium: there is something to gain from directing a powerful megaphone, even if it doesn't make money directly.

I don't have any background in finance, but it seems like there are a couple of possibilities.

First, given the recent precipitous fall in the NASDAQ, there's speculation that Musk will lower the offer (which seems quite reasonable).

Second, I'm not sure there's any reason to assume these new equity investors are paying the share price Musk is paying. If Musk pays $54.20 a share, and needs to raise 25% of the acquisition cost by issuing new equity, he could sell 49.99% of the new company at say, $30 a share to his partners and still raise the required capital.

Leveraged buyout at an inflated price in the short term. Banks backing the loans will get guaranteed interest payments on the loans plus a lucrative contract debt servicing and consulting fees in the medium term. Long term they'll IPO again and/or find a fool to acquire them.

Well I bought TWTR at it's peak... I'm voting my shares against a buyout (won't matter), mostly because it locks in a loss that I feel would have been recoverable in the next 5 years...

If you believe in Matt Levine's Elon Markets Hypothesis, paying 20% over market to be in close proximity to Elon's Twitter feed might be a bargain.

Being “locked in with Musk” has been one of the best investment strategies of the last decade.