Elon Musk is Destroying Tesla Stock with Twitter Hell.

all right so this Elon Musk drama versus

Twitter is just getting out of hand and

it's getting very very complicated so

yesterday we had a ruling from a judge

that basically delayed the trial from

October 17th to sometime in November

that's because the judge realized hey

okay well it looks like you uh guys have

a deal that looks like it might commence

by Honor around October 28th you guys

will have your deal complete so if the

transaction doesn't happen to close by 5

PM on the 28th why don't you just email

me you know the judge here and uh we'll

set us a trial date for November 26 2022

so basically Elon Musk buying a month

you know he didn't go to his deposition

which would have probably been a pretty

ugly deposition unless he pulled a

Donald Trump you know I play the fifth

which generally is not the best thing to

do uh in in some cases although some

attorneys say no it is the best thing to

do so I'm not going to get into whether

or not that's what you should do or

shouldn't do this is going to turn

political really fast otherwise but

anyway what's interesting here is that

uh I yesterday I made a little bit of a

mistake so there's this debt financing

commitment letter that was originally

filed around April 21st on the SEC

website that shows that Elon musk's 13

billion dollars of debt financing

expires on October 20th which that was

actually really interesting in terms of

timing because the trial was set for

October 17th then got pushed to after

October 28th which that would be past

this financing commitment which would

enable basically the banks to say buy we

don't want to do this deal anymore

because we're going to lose hundreds of

millions of dollars on it and if Elon

can't get his debt financing he actually

has the right to walk away from this

transaction and uh and and pay a one

billion dollar termination fee so his

deal is contingent upon financing now

Bloomberg doesn't seem to think that's

the case Bloomberg is making the

argument that no uh he actually in the

original contract had no contingency for

financing and now all of a sudden he's

trying to weasel in this contingency for

financing and I'm like Bloomberg did

y'all read the cancellation rights

because they're literally right here

this is a I'm using my iPhone right now

because for some reason my iPad HDMI

port's not working but this is the

iPhone 14 actually works really well for

this this is the Clause here that says

the merger agreement provides that

Twitter and the parent blah blah blah

blah may cause Elon Musk basically to to

go hard in terms of his Equity financing

commitment uh but if for some reason the

debt and margin loan are not available

which are seen right here now elon's

already killed the idea of using margin

so that's gone but right here this debt

and margin loan financing if that is not

funded or not available as we see right

here then parent which is Elon Musk will

be required to pay Twitter a termination

fee of one billion now you can read the

legalese there I'm just kind of

summarizing that right now right so in

in summary looking at the termination

right it's like well it's right there

there's a contingency for debt and

margin loan so I don't know why

Bloomberg is making this argument that

oh he doesn't have a contingency for

financing and he's trying to weasel that

in that's not the case he's always had a

contingency for financing but financing

the original financing agreement had an

expiration date of October 20th however

it looks like there's a new financing

agreement that actually included a

six-month extension all the way to April

25th so this complicates things a little

bit because is Elon actually going to be

able to delay this trial to April to get

that debt financing to expire it's

possible but it would take a lot of

effort so this is not as cut and dry as

we thought it was yesterday because that

debt financing is actually still going

to be around for another six months now

what is interesting though and this is a

very complicated section to read and and

I'm not an attorney so I can't even tell

you if I've read it correctly but my

understanding here is and this is in the

debt financing commitment letter my

understanding here is that there is a

minimum Equity contribution required in

this deal and it is sent at 40 percent

now I think that's really interesting

because it makes me wonder okay well if

uh if if for example uh 13 billion

dollars of debt is to represent

UH 60 at Max uh of of the financing

which would mean the rest is 40 Equity

well then if we go to a calculator and

we say all right 13 billion dollars

represents no more than 60 percent debt

then the minimum valuation of Twitter

would have to actually be about

21.6 billion dollars and that's really

simple you just 13 billion dollars

divided by 0.6 and that would mean the

minimum Equity is the difference so

minimum equity in this case would be 8.6

right uh and the valuation would be 21

bill in that case well we know that the

deal is actually being done at 44

billion so that shouldn't be an issue

right maybe so some people are now

speculating that it's possible that the

banks could say thanks to this

particular Clause here the banks might

be able to say hey hey hey you know what

the fair market value not what you're

paying but right here the fair market

value of Twitter is actually a lot lower

than what you're paying therefore we're

going to kill the financing because we

don't think the minimum Equity is in

effect

now to some extent

people believe that this is a possible

out for Elon but it would be a really

bad probably bad look for the banks to

re-nag on their debt financing

commitments and they probably lose some

clout on Wall Street unless of course

Wall Street is convinced that Elon is

overpaying by that much and people are

like yeah no we don't blame you banks

for pulling out but then again you know

Elon and and well okay I'm not gonna

make a joke here never mind

so uh it's gonna be a pulling out joke

and you know Elon doesn't generally pull

out you know so it's kind of unique you

know we we gotta help population I mean

I told you it was gonna be a bad joke

so anyway uh what's what the other

option is is that uh Elon Musk

potentially then just kicks the can down

the road until April but that would take

a lot of gamesmanship which some people

are actually saying is potentially

exactly what's happening because now

there's talk that well if Elon Musk is

supposed to close his deal in the next

two weeks or three weeks here then he

should have been already talking to

Banks to to say like hey like get ready

to send your money like it doesn't just

happen overnight to send your money like

it's going to take some effort to send

the money over and rumors are from

people not authorized to talk on this so

this is sort of as reported by The Wall

Street Journal and Bloomberg and such

rumors are that Elon Musk has not yet

contacted any of the banks to tell them

like hey get the financing ready like

I'm serious about closing so this is

sort of raising the prospect that oh

Elon is just playing games here and now

he's going to do whatever he can to milk

the clock you know apparently he delayed

his deposition for fear because uh you

know somebody on his legal staff was

potentially exposed to coven and so it

makes you wonder like okay we kicked

this into November oh well now we've got

you know the Black Friday sales events

or whatever for Tesla or whatever you

want to argue or over the holidays it's

Thanksgiving oh now it's Christmas and

then you know what are we going to say

the January problem is oh no I'm saying

I don't know I mean maybe you can kick

the can down the road but I don't think

the judge is going to play with that and

let this go until April remember Elon

Musk and Twitter and uh yeah Tesla uh

well elon's legal team originally asked

for a court date in April problem

originally like way back in the day when

they were trying to cancel this deal

they asked for a court date in April

which kind of makes you wonder like oh

you guys were trying to get that

financing expire and the judge is like

no I'm gonna go for October you know it

kind of is all lining up they're trying

to milk the clock to April here and uh

you know other people are saying hey but

what about like if what if his other

Equity Partners don't come through and

could this create selling pressure on

Tesla well that Clause is actually right

here it's actually 9.9 B I think it is

yeah 9.9 B in uh in the termination

section here of the original agreement

and section 9.9 highlighted in the

yellow here basically says the company

can force Elon to come up with all the

equity that's required in this deal

which is somewhere around 31 billion

dollars so if Elon gets Equity partners

of 20 billion dollars great then Elon

has to bring up 20 billion dollars less

but if they all bail the company Twitter

can force Elon to come up with the full

31 billion dollars but the only

contingency he has is that 13 billion

dollars of debt financing that's that's

an actual contingency that he does have

so again you know why why Bloomberg and

I'll show you what they're saying too

and I just think it's ridiculous but why

Bloomberg is uh and then I want to talk

Tesla really quick because it's just

having another terrible day in a row

again it's it's just it's I feel like

I'm melting away here

but anyway

um Bloomberg Bloomberg had the following

to say which I posted on Twitter follow

me on Twitter if you don't yet uh but

they had the following to say here on

Twitter talks between Elon Musk and

Twitter to reach an agreement blah blah

blah blah uh the okay here the

billionaires lawyers say that musk was

willing to do 54-20 pending receipt of

proceeds of debt financing and then they

write the original deal didn't contain

such a contingency and I'm thinking to

myself like what's your agenda here

Bloomberg because like I don't know

about you and again maybe because I'm

not an attorney I'm just reading it

wrong or something like that but I'm

pretty sure the cancellation right for

Elon is pretty clearly outlined in the

original agreement up top here and you

know you can pause that and read it

yourself but I'm pretty sure that top

section there basically says uh that

margin loan financing and debt financing

has to be funded or available it says it

right there so I I I don't know but what

I do know is that Tesla stock is falling

and probably honestly a lot I think has

to do with the overhang well not only

the macro overhang that rates are going

to go even oh my gosh it's a 228 now are

you serious oh we're about to get some

retail capitulation holy crap dude look

at my Weeble okay this is disgusting you

can see my Weeble cost basis which is

not everything I have on Tesla but you

can see my Weeble cost spaces

oh I'm getting effed

oh it feels so good

uh anyway so uh no it it actually is

pretty miserable uh but that's okay

so uh you got to go through the pain to

have the the gains

oh God that sounds so corny but anyway

uh some of this overhang is because of

Twitter because people know like if his

Equity financing Partners bail elon's

gonna have to come up with the rest and

he's gonna have to sell more

Tesla is his piggy bank

so to suggest that there isn't an

overhang of Twitter over Tesla

wrong is a massive massive overhang it's

terrible it's painful

and uh and of course I'm I'm at a hotel

uh traveling

and the Market's crashing

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really appreciate you and just good luck

out there folks it's it's a nasty time

good luck