Elon Musk loses money on Twitter share. He can still buy Twitter – if he wants to.

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Elon Musk is sitting on a loss in his

Twitter

position. The loss is peanuts compared to what has happened to his

Tesla

storage. Despite all the red ink, the world’s richest man can still buy Twitter – if he still wants to.

Twitter (ticker: TWTR) closed $ 35.76, down 5.5%, amid broad market sales catalyzed by weak revenue streams from

Snap

(SNAP). The

Nasdaq Composite
fell 2.3 percent. Snap stock fell 43.1 percent. The Tesla (TSLA) stock fell 6.9% and ended at $ 628.16.

The decline on Twitter and Tesla on Tuesday did not seem to have anything to do with Twitter’s potential purchase of Musk, but they still hurt the Tesla boss. Musk’s original share of 73 million plus, which was announced on April 4, cost him an average of around 36.16 dollars.

Twitter shares had not closed below this since the stake was announced. Musk is down about 40 cents a share, or about $ 30 million, based on early records revealing his stake.

That amount of money is not a big deal for Musk. The decline in Tesla stock means much more. Since Musk’s first stake in Twitter was revealed, Tesla shares have fallen around 45%. The fall in Tesla has cost the CEO around $ 87 billion in wealth. (The math is a bit nuanced. Musk sold around 9.6 million shares at the end of April at higher prices to fund his Twitter purchase).

Musk’s remaining 163 million shares are worth around $ 102 billion. He plans to use the shares to borrow around $ 6 to $ 7 billion against the value of his stock to finance part of his Twitter purchase. He is allowed to borrow up to 25% of the value of his Tesla share, giving him a borrowing capacity of around $ 25 billion. Musk, however, probably does not have as much as $ 25 billion in margin loans available to him; he has borrowed against the value of his shares in the past.

Investors need to know how much money he has borrowed, or repaid, to get an accurate sense of Musk’s borrowing capacity. Tesla did not respond to a request for comment on the status of Musk’s previous margin loan.

Musk needs, roughly speaking, an additional $ 9 billion to buy the over 690 million shares on Twitter he does not own. Musk already has non-margin debt, cash from Tesla sales and billions from other stock partners.

He has other sources of cash, mainly SpaceX shares, earned Tesla stock options. He could also sell more Tesla shares and avoid the margin loan, but Tesla shareholders will not like to see more large blocks of Tesla shares sold.

In addition, the $ 9 billion figure assumes that Musk will pay the original price of $ 54.20 per share. That is far from certain. Musk goes back and forth with Twitter management over the number of spam tweets, which Musk says is a significant factor when considering what Twitter is worth. Twitter said it is about 5% of daily active use. Musk thinks it is much higher.

The market seems to believe that no deal or a deal at a lower price is the most likely outcome of back and forth. The Twitter share is $ 18.44 below Musk’s bid. That means a 52% gain for someone who buys Twitter now. In other words, it is 34% below the bid price.

The market is not waiting for the gain to be realized. It is waiting for a new shoe to drop.

Write to Al Root at allen.root@dowjones.com