According to a report by Reuters, Elon Musk promised banks that agreed to help fund his $44 billion acquisition of Twitter Inc that he could cut executive and board pay at the social media business in an effort to minimise expenses, and that he would discover new ways to monetize tweets.
According to the individuals, Musk made the pitch to lenders as he tried to arrange funding for the buyout days after submitting his bid to Twitter on April 14. His bank pledges, which he submitted on April 21, were crucial in Twitter’s board accepting his “best and last” bid.
Musk had to persuade the banks that Twitter’s cash flow was sufficient to service the loan he was seeking. In the end, he was able to acquire $13 billion in loans secured against Twitter, as well as a $12.5 billion margin loan secured against his Tesla equity. He promised to pay the balance of the payment with his own money.
Musk has tweeted about cutting the wages of Twitter’s board directors, which he claims will save the company $3 million. According to corporate documents, Twitter’s stock-based compensation for the 12 months ended December 31, 2021, was $630 million, up 33% from 2020.
Musk also mentioned Twitter’s gross margin, which is substantially lower than peers like Meta Platform Inc’s Facebook and Pinterest, in his pitch to the banks, claiming that this gives plenty of room to run the company more cost-effectively.