How Elon bought Twitter with other people's money

The Indicator from Planet Money

NPR

Business

4.7 • 9.2K Ratings

🗓️ 1 December 2022

⏱️ 9 minutes

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Summary

Elon Musk bought Twitter for $44 billion, but almost a third of it was in loans—and Twitter's on the hook to pay them back. This strategy, popular in the '80s, is called a leveraged buyout.

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Transcript

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0:00.0	NPR.
0:07.0	A month ago, Elon Musk finally took ownership of Twitter.
0:16.9	Maybe it feels way longer than that to you.
0:19.1	It feels a lot longer than that, Wyland.
0:20.8	We've all aged 100 years.
0:22.6	But actually, it's only been one month since he posted a video of himself walking into
0:28.1	Twitter headquarters carrying a sink.
0:30.9	I remember that.
0:31.9	I mean, it's a type of humor, but that Twitter buyout wasn't even all his own money.
0:37.4	I doubt he even spent his own money on the sink.
0:40.0	Because you know what?
0:41.0	Super wealthy people like Elon, they don't spend their own cash on stuff.
0:45.7	They use something known in the world of corporate finance as OPM.
0:49.7	That's a technical term.
0:51.8	That's right.
0:52.8	It stands for other people's money.
0:54.6	It's actually the title of a 1991 movie starring Danny DeVito.
0:59.1	I love money.
1:02.0	I love money more than I love the things it can buy.
1:05.6	In the movie, Danny DeVito plays a greedy corporate writer.
1:08.7	And he's playing with a slinky as well.
1:10.7	There's only one thing I like better.
	...

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