Comment on Mmusks new ideas

• valkyre09@lemmy.world ⁨11⁩ ⁨months⁩ ago

  Hold on…. You’re saying I can take out a loan for $x amount of dollars against a company I don’t own yet and buy it with that money?

  if I take out a mortgage for a property before I buy it and I destroy the house; the bank still comes after me for the value.

  Am I being stupid or is the game more rigged than I thought?

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  • Buffalox@lemmy.world ⁨11⁩ ⁨months⁩ ago

    Hold on…. You’re saying I can take out a loan for $x amount of dollars against a company I don’t own yet and buy it with that money?

    Yes

    I take out a mortgage for a property before I buy it and I destroy the house; the bank still comes after me for the value.

    Not the same at all, a house can’t be a legal person, the money Musk borrowed in twitter is owed by twitter, not by Musk. That is possible because companies can have limited financial responsibility, meaning the money they owe are not owed by their owners. It’s a pretty nifty arrangement, to help the rich stay rich no matter what happens.

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  • zaph@lemmy.world ⁨11⁩ ⁨months⁩ ago

    if I take out a mortgage for a property before I buy it and I destroy the house; the bank still comes after me for the value.

    There’s a type of insurance for everything.

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  • anlumo@feddit.de ⁨11⁩ ⁨months⁩ ago

    if I take out a mortgage for a property before I buy it and I destroy the house; the bank still comes after me for the value.

    Only if it was destroyed intentionally.

    Of course, it could be argued that Musk is destroying Twitter intentionally, but that’s for a court to decide.

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  • squiblet@kbin.social ⁨11⁩ ⁨months⁩ ago

    That's what bankruptcy is for. Twitter files bankruptcy, and they can officially tell the banks to stuff it.

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• dragontamer@lemmy.world ⁨11⁩ ⁨months⁩ ago

  Not quite. The the $33 Billion of equity Elon Musk put up junior to the $13 Billion loan.

  That means that if the company starts at $44 Billion then falls to $15 Billion, then Twitter still owes $13 Billion, but Elon Musk only has $2 Billion now.

  Leveraged buyouts are… well… levered. It grossly increases the risk of losing everything.

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