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Cohan on Elon’s Next Shoe to Drop
$(preheader)  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 
The Daily Courant

Tesla’s Judgment Day, Biden’s New Calculus, NBC News Blues

Welcome back to the Daily Courant, your afternoon guide to what’s new at Puck.

First up, William D. Cohan explains how Elon’s decision to margin his Tesla stock to buy Twitter could be a fatal mistake for the carmaker—if not for Musk himself. How the hell did the board let it happen?

Plus, below the fold, Julia Ioffe reveals the growing frustration inside the White House as Zelensky pushes his luck with new demands. Dylan Byers reports on the eye-rolling inside NBC over Cesar Conde’s Ukraine war tour. And Matt Belloni discusses the explosive legal loophole that could strip Marvel of its superheroes.

Elon’s Gamble: Imagining Tesla Stock Judgment Day
Elon’s Gamble: Imagining Tesla Stock Judgment Day
Musk’s decision to secure Twitter with his Tesla stock leaves him vulnerable to a punishing margin call. Will Tesla shareholders pay the ultimate price for his Twitter folly?
WILLIAM D. COHAN WILLIAM D. COHAN
Since about midday on Monday, much of the media, along with the extremes of our political spectrum, have been losing their collective lunch over what Elon Musk’s acquisition of Twitter will mean for Twitter, for open debate, for “free speech,” for Trump and Alex Jones and other disinformation artists, for Bezos and Gates, and so forth and so on. Sure, these are all valid questions pertaining to Musk’s decision to take Twitter private for $44 billion and to becoming its sole owner, at least until he can find some equity partners. But one key constituency has thus far been ignored, and, on some level, it might be the most important: the Tesla shareholders.

Musk’s bid, after all, is financed by $25.5 billion of debt that Morgan Stanley and its Wall Street brethren are underwriting. Those banks, of course, will syndicate the loans to other banks and to other buyers, or will sell the various senior notes to investors, at a price. But to get $12.5 billion of the $25.5 billion, Musk secured a “margin loan,” meaning that he pledged his Tesla stock as collateral. Usually, such a loan is made at a 50 percent loan-to-value ratio. In order to get the banks to pony up a $12.5 billion margin loan, Elon probably had to pledge $25 billion of his Tesla stock to the banks. That means if the value of the Tesla stock falls by a certain amount, the banks can seize the collateral, in this case the Tesla stock, and sell it into the market at whatever price it will fetch to pay down the loan. Elon will have no say in the matter...
CONTINUE READING ONLINE
FOUR STORIES WE'RE TALKING ABOUT
Biden’s New Calculus
Biden’s New Calculus
Providing too many weapons to Ukraine wouldn’t stop the inevitable, the thinking went. Now, the calculus is different.
JULIA IOFFE
NBC News Blues
NBC News Blues
30 Rock is aflutter with eye-rolling over the NBC News chairman’s recent trip to Lviv. Are larger frustrations afoot?
DYLAN BYERS
The Termination Loophole
The Termination Loophole
Matt and lawyer Aaron Moss discuss a freshly-relevant legal loophole called “termination rights." For Marvel, it could mean trouble.
MATTHEW BELLONI
HBO's Lakers Headache
HBO's Lakers Headache
NBA legend Jerry West is demanding a retraction over Winning Time and is hinting at a lawsuit.
ERIQ GARDNER
swash divider
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