[credit_guy]

So let me recap: you (Musk) get a loan ($12.7 BN) from banks, with the idea that the company you buy will be used as a collateral. Before the sale is closed, you can't put it on the company's balance sheet, because you don't own it. But after that you can.

Wait a second. It's true that Musk now owns the company, but transactions between the company and its (sole) owner are still at arm's length, arent's they?

As a pure coincidence, today I received in the mail the bankruptcy ruling for a preschool that went bust and where we have paid $3000 in advance to enroll our daughter. The judge ruled we'll get $1400. But during the lawsuit it transpired that the owner gave himself a nice loan of more than $100k. He had to give the money back (I don't know all the details, although I can find out; I think he settled for a somewhat smaller amount).

Maybe I'm naive, but I think that should happen with larger companies too. Just because you are the sole owner of a company does not mean the company can just lend you money on whatever terms you decide. It's the ultimate conflict of interests.

On the other hand, if the prior shareholders cooperated with Musk, I can see how the debt could be on Twitter's books. But then, it's them who saddled the company with debt, isn't it?

[fakedang]

Please read up on the concept of Leveraged Buyouts (LBOs), which were a thing since the 70s and 80s. Private equity LBOs have been a thing precisely because of credit available from banks. Last I checked, PE firms such as KKR are still prosperous, in spite of conducting an LBO of similar scale (RJR Nabisco), after saddling the company with extremely high amounts of debt (for the 80s).

And please don't drive the discussion to tangents and anecdata, even though your analogy is flawed.