If 'Risk-It-All' Had A Face: Who Else? Elon

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May 02, 2022

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You’d learn why cutting living expenses won’t save you and how to protect the value of your hard-earned money especially from plagues like inflation.

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As it’s customary, we bring you the juiciest of the market news every week & we can’t wait to dive into this week’s chat! Shall we?

WHAT’S UP WITH FAANG ?

FAANG stocks have been dealt some pretty brutal blows this year, and it’s only May.

Now, unless you’re really up to date on your stock market lingo, you’re probably wondering what FAANG means (why else am I here than to demystify these jargons to you 😉). As always, Tomi has your back. Here you go:

FAANG is an acronym for the 5 major American technology companies which are Meta (formerly known as Facebook), Amazon, Apple, Netflix, and Alphabet (formerly Google) -> so yea, the F-A-A-N-G combined 😄. The acronym was originally FANG excluding Apple but investors began to add Apple to the list in 2017.

I mean, why not Apple? So rude!

Anywhos, Back to the real gist,

FAANG companies and Microsoft lost a combined $1.4 trillion in market value in April and their combined market cap has dropped by about $2.21 trillion in 2022.

Hold up, over 1 trillion? In a month?

Amazon shares fell by 14% on Friday, Netflix shares have fallen by 64% this year and Microsoft has lost $495.4 billion dollars in value in the past four months.

The stock market is a blood bath right now; Cough cough - diversify your portfolio, guys!

IT’S OFFICIAL: A TWISLA TAKEOVER

On Monday 25th April, Twitter finally agreed to Elon Musk’s takeover bid.

I’m sure no one is surprised. Much like a tornado, Elon takes everything he sets his eyes on.

The deal entails Elon buying Twitter at about $54.20 per share, AKA $44 billion in total. Upon completion of the deal, Twitter will no longer be a publicly traded company. Additionally, Musk has made it oh-so-clear that his primary interest with Twitter is protection of free speech.

But the biggest question on everyone’s mind is ‘How, on earth, is Elon Musk going to fund a $44 billion dollar buyout?’

Looking at his $250 billion net worth, you might think that’s not so difficult but the issue is most of Elon’s worth is tied up in Tesla shares.

According to the documents Musk filed with the SEC, his financing plan consists of $13 billion dollars in bank loans, $21 billion in cash (likely from selling his Tesla shares) and a $12.5 billion margin loan, using his Tesla shares (again) as collateral. He will most likely be required to pledge about $65 billion in Tesla shares (which is about one-quarter of his current holdings) to secure the loan.

Before the current Twitter bid, Musk already had about $90 billion worth of shares pledged for loans. Should this Twitter deal go through, along with adding ‘Owner of Twitter’ to his long list of titles, he would also be adding ‘America’s Most Leveraged CEO’.

Which in layman terms is pretty much ‘Overall best in Borrowing.’

I guess it's only because you have something to borrow against -_-. Talk about a man with a heart for risks! I mean, this dude has his hands in a few hot pots & I guess he can claim he’s done a decent job so far, but dang son! If this ain’t aggressive, i-d-k what is.

Tesla shares dropped by 12% on Tuesday after news of Twitter’s acceptance became public, cutting more than $20 billion from Elon’s net worth. So remember the $250 billion networth we quoted earlier? It suddenly became ~$220 billion - I mean, Potato Patahto but…

For Elon’s sake, I sincerely hope this Twitter deal is worth it.

AMAZON AT IT AGAIN: PROJECT KUIPER

Amazon also never ceases to ‘do-the-most’. The company has unveiled its plan to deliver internet from space using 3,236 small satellites in low Earth orbit: called Project Kuiper.

Just last month, Amazon signed a multibillion-dollar contract (it's all billions & trillions over here) — the largest rocket deal in the history of the commercial space industry — to launch its Kuiper satellites with three different entities: Jeff Bezos’s Blue Origin, United Launch Alliance (a Boeing/Lockheed Martin joint venture) and Europe’s Arianespace.

🌝Looks like Elon Musk’s Space X’s Starlink has got company!

Although SpaceX’s Starlink has 2,000 of the 12,000 approved satellites in orbit with 250,000 subscribers to date, it might not be long before Kuiper joins the stage. Elon: Welcome Aboard, Jeff.🥶

Is Amazon just ‘kinging’ the Everything-Company nickname?

This would be cool to watch: Elon vs. Jeff