Musk says he has $46.5 billion lined up for Twitter financing

Tesla Inc. CEO Elon Musk says he’s secured $46.5 billion in funding for a takeover of Twitter Inc. But more than two-thirds of that is either coming from his own pocket or borrowing against his Tesla shares.

Musk’s filing with the U.S. Securities and Exchange Commission on Thursday details $25.5 billion in debt financing from Morgan Stanley and other financial institutions, including margin loans backed by his equity stake in Tesla. It also includes $21 billion in equity financing to be provided by Musk himself.

Musk currently has about $3 billion in cash or other somewhat liquid assets after spending $2.6 billion buying a 9.1 percent stake in Twitter in recent months, according to Bloomberg estimates. His other holdings are tied up in Tesla stock — about $184 billion worth — and his ownership of closely held Space Exploration Technologies Corp.

The big question is whether Musk would consider selling part of his stake in one of his prized companies to acquire Twitter.

Musk would need to pledge about 58.7 million Tesla shares to secure the $12.5 billion margin loan facility included in the debt financing. That would bring the total percentage of shares he’s pledged to about 85 percent of his holdings. The margin loan facility documents do allow Musk to sell his unpledged Tesla shares.

The unpledged shares are worth more than $25 billion, so if he sold almost all of them, it’d be enough to cover the $21 billion in equity financing, after taxes, coupled with the cash he has now.

Alternately, Musk could find partners to contribute to his equity financing. But one thing’s for sure: The mystery over how Musk will fund his bid was only partially solved today.

Musk and Jared Birchall, the managing director of Musk’s family office, didn’t immediately respond to a request for comment on how Musk plans to finance the $21 billion. Shares of Tesla pared early gains of as much as 12 percent, trading up 6.4 percent to $1,040.68 as of 12:47 p.m. in New York.