Tesla bull Ron Baron claims Musk got a good deal on Twitter
Cameron Costa | CNBC
Ron Baron, one of the by Tesla Major shareholders and CEO of Baron Capital suggested Thursday that Musk got a good deal on his Twitter acquisition, having previously called Tesla’s CEO involvement in the company. “nonsense. “
In a statement to CNBC’s Becky Quick, Baron said that after doing two days of initial due diligence, he found the plan interesting.
“I assume 2-3 times the return or more in the next 4-5 years if successful,” Baron told Quick. “Really low purchase price since the business had been so poorly managed. Actually incredibly cheap and it would have stayed that way if Musk hadn’t offered to acquire. In my opinion.”
The comment comes when a new regulatory document released Thursday showed that Baron Capital subsidiary BAMCO has pledged $ 100 million in shares to support the acquisition of Musk. Musk has secured more than $ 7 billion in total from a group of investors, including BAMCO, to support his $ 44 billion Twitter purchase, which he plans to take private.
The CEO of Baron Capital had first he shrugged the importance of Musk’s initial investment of about 9% in Twitter and his seat on the board, calling it “small” for a man worth hundreds of billions of dollars. After those comments, Musk turned the tide, deciding that he would rather buy Twitter and make it private than just sit on the board as one of his largest shareholders.
After Twitter’s board of directors accepted Musk’s takeover bid, Securities and Exchange Filings revealed it sold approximately $ 8.4 billion in Tesla stock. Musk said he secured $ 25.5 billion of fully committed debt to help fund the deal with Twitter, including $ 12.5 billion in loans against its Tesla stock.