Unless you live under a rock, you must have heard by now that Elon bought a 9% stake on Twitter. Such a move would have cost him (at around $30 per share), some $3-4 Billion (with a B). The thing is that from what we know, he didn't have several billions of dollars laid around in cash. So where this money came from?
As you may recall, Elon had to sell Tesla stock to pay his income tax, a few months ago. His compensation from all the companies he is involved in is peanuts compared to that amount of cash, and a large part of that compensation is in equity. To get $3-4 Billion in cash, he should sell 3-4 million Tesla shares. But he didn't - if he did, he should submit a notification to the SEC. So what did he do?
The most profound answer is that he borrowed those billions from his securities firm, using his Tesla stock as collateral - pretty much what most DeFi platforms are doing. Up to that point, he could have moved to buy more Twitter stock, before filing his initial notification. He knew that once the Elon effect started, the stock would boom - and it did. His herd went to buy Twitter as if there was no tomorrow, and skyrocketed its stock price up to $53 a share. The thing with the Elon effect, is that is only lasts for 2-3 days. After that, the price goes back to balance. At currently $47.50, we are half way there.
Remember that his initial statement was submitted as a passive investor, and them he had to re-submit it as an active investor, when he took a seat at the Board - despite he was in talks with them to take that seat long before he had to submit any filing? This was not by mistake. He knows that as an active investor, he must submit filings for all his transactions on the stock, not just at certain points (5%, 10%, 20% etc.). What he did was a classic pump-and-dump trade. He dumped any excess stock he didn't need to have, before accepting that seat, at around $52 per share, pocketing a profit of around $15-20 per share - effectively, paying for half of his Twitter investment with other people's money. Your money.
Reminds the prose part of the Britney Spears hit mock we published a few months ago (here: https://www.publish0x.com/the-other-side/ooops-he-tweeted-again-xryklzw):
- Elon, before you go, there's something I want you to have
- Oh, it's beautiful, but wait a minute, isn't this your last dollar?
- Shh... Yeah, yes it is
- But I thought you were saving it for an emergency
- Well baby, I went down and got it for you
- Aww, you shouldn't have