Elon Musk May Be Mulling Ways to Raise Latest Money to Pay Down Twitter Debt

Good morning. I’m Phil Rosen, reporting from Los Angeles. 

The great weather here has left me postponing my return to wintry Latest York. After weeks of sunshine, a couple of seconds of Manhattan air just might give me frostbite at this point.

And speaking of cold hard reality, the Wall Street Journal reported that Elon Musk is trying to boost fresh funds to repay a few of the pricier bits of his $13 billion Twitter loan.

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elon musk

Elon Musk.

Screenshot via YouTube/The Boring Company

1. Latest fundraising to the tune of $3 billion could help Musk repay the obligations he took on in his Twitter takeover. 

Sources told the Wall Street Journal yesterday that the Chief Twit’s team has been exploring options for an equity raise that could possibly be used to pay down the costliest slice of the $13 billion debt.

Twitter’s unsecured bridge loans, which total about $3 billion, carry a ten% rate of interest along with the secured overnight financing rate, which has soared in recent months. 

For each quarter that goes by without refinancing, the rate of interest goes up by a further 0.50 percentage point, regulatory filings show. 

That said, if Twitter will pay back those unsecured bridge loans, meeting its debt obligations can be way more manageable.

Still, there is no guarantee that fundraising comes through, as investors remain wary of Twitter’s ability to generate cash-flow. 

In December, former credit analyst Jeffrey Davies predicted that Twitter’s total interest expense is roughly $1.25 billion per yr. That comes out to only about $3.4 million per day in interest payments.

Musk predicted in December that Twitter’s business will break even in 2023 because of cost-cutting measures (including letting go of some 6,000 staffers). 

Remember, it has been 4 years since Twitter notched an annual profit, and it’s posted a loss in eight of the last 10 years. 

Musk knowingly took on a sinking ship, and securing more investors to assist him achieve this will play a key role in how his social media gambit plays out.

What are some ways you think that Elon Musk could boost revenue at Twitter? Tweet me (@philrosenn) or email me (prosen@insider.com) to let me know. 

In other news:

traders nyse

Reuters / Brendan McDermid

2. US stock futures rise early Thursday, as investors digest the newest release of corporate earnings. Each Tesla and Levi’s were amongst stocks that beat revenue expectations. Meanwhile, traders can even be anticipating data on jobless claims, gross domestic product, and sturdy goods — all due out today. Listed here are the newest market moves.

3. Earnings on deck: Visa, MasterCard, and Diageo, all reporting.

4. This contrarian value fund manager beat 99% of his competitors last yr. He explained the 4 rules that helped him develop into among the best managers on Wall Street — and eight of his favorite stocks to purchase right away.

5. The short-seller who exposed fraud at Nikola is now targeting a conglomerate owned by the fourth-richest person on the planet. Hindenburg Research released a report Wednesday that alleged the billionaire chairman of Adani Group is “pulling the most important con in corporate history.”

6. Mortgage applications jumped for a 3rd straight week. Housing-market activity is trending toward a rebound as rates of interest ease. Currently, the 30-year fixed-rate mortgage is at a four-month low.

7. Don’t rule out further inflation surprises just yet. At the least that is what Goldman Sachs analysts are saying. They explained three signals that investors can study to raised predict price movements. 

8. Credit Suisse’s stock chief said investors are piling into all of the unsuitable sectors. Markets appear to be anticipating a recession that will not come, in his view. He broke down three areas to pile money into for the most effective returns.

9. Evercore really useful these 12 oversold growth stocks to reap the benefits of China’s reopening. This batch of Chinese corporations look poised to recuperate a few of their recent losses, as evidenced by rising earnings estimates. Get the list.

Bitcoin price on Jan. 26, 2023

Bitcoin price on Jan. 26, 2023

Markets Insider

10. Bitcoin and other cryptocurrencies pared a few of their January gains within the last 24 hours. Still, the crypto market as an entire has regained its $1 trillion valuation in 2023 — and the world’s hottest token has seen a 36% jump this month.

Curated by Phil Rosen in Los Angeles. Feedback or suggestions? Tweet @philrosenn or email prosen@insider.com

Edited by Max Adams (@maxradams) in Latest York and Hallam Bullock (@hallam_bullock) in London.

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